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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA NO 25 OF 2022
CHRISTINA JOSEPHINE CRAGNOLINI
Appellant
V
GEORGE ALEXANDER CONSTANTINOU AS EXECUTOR OF THE ESTATE OF SIR KOSTAS GEORGE CONSTANTINOU (DECEASED), THE EXECUTOR OF THE ESTATE OF
SIR THEOPHILUS GEORGE CONSTANTINOU (DECEASED) AND ADMINISTRATOR OF THE ESTATE OF SIR GEORGE CONSTANTINOU (DECEASED)
Respondent
Waigani: Cannings J, Miviri J, Tusais J
2023: 28th June, 13th July
PRACTICE AND PROCEDURE – multiplicity of proceedings concerning same parties – whether abuse of process – whether proceedings frivolous or vexatious – National Court Rules Order 12 rule 40(1) – whether good reasons for commencement of separate proceedings.
DECEASED ESTATES – whether beneficiary of deceased estate may commence proceeding against administrator claiming damages for negligence and breach of fiduciary duties while a proceeding commenced by administrator seeking advice from National Court as to administration of the estate is unresolved – Trustees and Executors Act, s 46 (advice etc in management etc of trust property).
The appellant is the beneficiary of the deceased estate of her father, who died in 2008. Probate was granted in 2009. By 2020, distribution of proceeds of the estate remained unresolved and she commenced a proceeding by writ of summons against the administrator of the estate (the respondent) claiming damages and other relief for negligence and breach of fiduciary duties in administration of the estate. In 2022 the National Court summarily dismissed the WS proceeding for being frivolous, vexatious and an abuse of process in view of two other National Court proceedings regarding administration of the estate, both of which were still current. One was commenced by originating summons in 2018 by the respondent under the Trustees and Executors Act 1966 seeking the opinion, advice or direction of the Court on a range of questions regarding the estate. The other was commenced by originating summons by the appellant in 2020 under the Wills, Probate and Administration Act seeking orders that the administrator provide an inventory and audited accounts of the estate. Trials in the OS proceedings were completed and judgment reserved, but no judgment had been given in either proceeding. The primary judge held that matters in relation to administration of a deceased estate should not be dealt with on a piecemeal basis when the administrator is seeking guidance and direction from the Court. The WS proceeding was premature and prejudicial to the respondent as it required him to answer to allegations of mismanagement of the estate while still waiting on the Court to give him guidance and direction on administration of the estate. The appellant appealed to the Supreme Court against dismissal of her WS proceeding, arguing that the primary judge erred in law in the exercise of discretion as to summary dismissal of proceedings under Order 12 rule 40(1) of the National Court Rules. The respondent filed a notice of contention under Order 7 rule 29 of the Supreme Court Rules, contending that the primary judge, though correctly deciding to dismiss the WS proceeding, erred by failing to find that: (a) the appellant was obliged to raise the issues that arose in her WS proceeding in the respondent’s OS proceeding; (b) the appellant was seeking relief in her WS proceeding inconsistent with the relief sought in the respondent’s OS proceeding, to which she had consented; (c) the appellant was, by bringing the WS proceeding, creating the risk that orders would be made that were inconsistent with the relief granted in the respondent’s OS proceeding; (d) the WS proceeding was an abuse of process due to (a), (b) or (c).
Held:
(1) A proceeding commenced by a party, which relates to the same subject matter of other proceedings commenced by the same or a different party that remain unresolved, is susceptible to being regarded as giving rise to a multiplicity of proceedings on a piecemeal basis and an abuse of process, unless good reason is shown for commencement of that proceeding.
(2) A proceeding that has no reasonable prospect of success may be regarded as frivolous.
(3) A proceeding commenced with a view to harassing a defendant or prejudicing their interests or their ability to defend other proceedings may be regarded as vexatious.
(4) The discretion available to the National Court in Order 12 rule 40(1) of the National Court Rules to summarily dismiss proceedings for being frivolous, vexatious or an abuse of process must be exercised carefully after examining all the circumstances of a case.
(5) The appellant showed good reasons for commencement of her WS proceeding in that her OS proceeding was a discrete and separate proceeding involving a cause of action separate to the causes of action being agitated in her WS proceeding, and the WS proceeding pleaded causes of action that had accrued and were not dependent on the outcome of the respondent’s OS proceeding. Furthermore, the appellant had consented to the relief sought by the respondent in his OS proceeding so there was no prejudice to him arising from his having to wait for the National Court’s judgment in that proceeding; and the trials in both OS proceedings were completed and judgment had been reserved.
(6) The primary judge erred in law by failing to take a complete view of the circumstances in which the WS proceeding and the two OS proceedings had been commenced and the status of each of the three proceedings, which led to the erroneous conclusion that the WS proceeding was an abuse of process.
(7) The primary judge erred in law by finding without good reason that the WS proceeding was frivolous and vexatious.
(8) As to matters raised in the respondent’s notice of contention: (a) the appellant was not obliged to raise the issues that arose in her WS proceeding in the respondent’s OS proceeding; (b) the appellant was not seeking relief in her WS proceeding inconsistent with the relief sought in the respondent’s OS proceeding, to which she had consented; (c) the appellant was, by bringing the WS proceeding, not creating a real risk that orders would be made that were inconsistent with the relief granted in the respondent’s OS proceeding; and (d) there was no abuse of process in commencement of the WS proceeding.
(9) The appeal was allowed, the decision of the National Court was quashed and the WS proceeding was reinstated and remitted to the National Court.
Cases Cited
The following cases are cited in the judgment:
Cragnolini v Constantinou (2022) N9437
Government of Papua New Guinea v Barker [1977] PNGLR 386
Muirgen No 18 Ltd v Deugro (PNG) Ltd (2019) SC1838
PNG Forest Products Pty Ltd v The State [1992] PNGLR 85
Siu v Wasime ILG (2011) SC1107
Telikom PNG Ltd v ICCC & Digicel (PNG) Ltd [2008] PNGLR 303
Toap v The State [2004] 1 PNGLR 25
Wabia v BP Exploration Co Ltd [1998] PNGLR 8
Wanire v Biloi (2018) SC1721
Counsel
I R Molloy & J Kakaraya, for the Appellant
R J Webb SC & J Nigs, for the Respondent
13th July, 2023
1. BY THE COURT: The appellant, Christina Josephine Cragnolini, appeals against the dismissal by the National Court of a proceeding, WS 395 of 2020, she commenced against the respondent, the administrator of the deceased estate of her father, Sir George Constantinou, who died in 2008. Probate was granted in 2009.
2. The original administrator of Sir George’s deceased estate was Sir Theophilus George Constantinou. Sir Theophilus was discharged and replaced by Sir Kostas George Constantinou in 2019. Sir Kostas died in 2023 and was replaced by his son George Alexander Constantinou. The change in the name of the respondent for the purposes of this appeal took place at the hearing of the appeal on 28 June 2023 with the consent of the appellant and leave of this Court.
3. The appellant is a beneficiary of the deceased estate. In WS 395 of 2020 she, as plaintiff, claimed damages and other relief for negligence and breach of fiduciary duties by the respondent (defendant in the WS proceeding) in administration of the estate.
4. The respondent filed a motion for summary dismissal of the proceeding under Order 12 rule 40(1) of the National Court Rules, which was upheld by the National Court (Cragnolini v Constantinou (2022) N9437). The primary judge held that WS 395 of 2020 was frivolous, vexatious and an abuse of process in view of two other National Court proceedings regarding administration of the estate, both of which were still current.
5. OS 478 of 2018 was commenced by the respondent under the Trustees and Executors Act 1966 seeking the opinion, advice or direction of the Court on a range of questions regarding the estate. A trial was conducted and judgment reserved in June 2019.
6. OS 55 of 2020 was commenced by the appellant under the Wills, Probate and Administration Act Chapter 291 seeking orders that the respondent provide an inventory and audited accounts of the estate. A trial was conducted and judgment reserved in December 2021.
7. At the hearing of this appeal on 28 June 2023 we were informed that the judgments in both OS 478 of 2018 and OS 55 of 2020 remain reserved.
NATIONAL COURT DECISION IN WS 395 OF 2020
8. The primary judge held that matters in relation to administration of a deceased estate should not be dealt with on a piecemeal basis when the administrator (the respondent) was seeking guidance and direction from the Court in OS 478 of 2018. Her Honour stated:
22 I am of the view that the plaintiff [appellant] as a beneficiary to the estate of Sir George’s estate and any other beneficiary for that matter is clearly frustrated by the long drawn-out delay in the administration of the estate since its grant on 20 March 2009. No doubt it is a considerable estate with considerable worth. I find that matters in relation to the administration of a deceased estate cannot be dealt with on a piecemeal basis when the administrator is already in court seeking guidance and or direction as to administration of the estate. To my mind, an administrator should be allowed to carry out his/her functions as appointed by law and where there is such direction and or guidance that he seeks from the court, he should be allowed to take those measures in the best interest of the estate guided by the court. Only and until those measures are taken can the administrator be in a position to account after enquiry and taking necessary steps to administer the estate. A claim for mismanagement and or breach of duty of an administrator can clearly be defined after the fact, after he hears from the court, in this case pending the determination of OS 478 of 2018. It is a far cry from an estate of a deceased where the administrator has done nothing at all and has sat on his hands. In the estate of Sir George, OS 478 of 2018 suggests to me that the administrator has not left his duties idle, he has approached the court for appropriate direction and guidance on administering the estate and therefore that is a process to my mind, should and must be allowed to be seen through to allow progress on the administration of the estate.
9. Her Honour also remarked that WS 395 of 2020 was premature and prejudicial to the respondent, stating:
24 The administrator is put under the pressure of defending two proceedings relating to the estate when at the same time, he is seeking guidance/direction from the court. The administrator is prejudiced in this instance having to defend two proceedings when it would be proper to get guidance from the court then act accordingly and only after that opportunity, respond to any claims for presentations of accounts, and or claims for mismanagement.
10. Her Honour concluded:
26 I am of the view that these proceedings are an abuse of the court’s process and are frivolous and vexatious for the reason that the defendant as the administrator is prejudiced in defending two proceedings when he is yet to receive guidance and direction from the court as to the administration of the estate. Dismissing these proceedings, therefore, does not diminish plaintiff’s right and is not pushing plaintiff off the judgment seat. Until the court determines OS 478 and issues appropriate directions and guidance, an account of the administration of the estate of Sir George can then be demanded if it is further delayed and or any allegations of breach of duty can be advanced but not until the administrator is given an opportunity to act accordingly as sought in OS 478.
ISSUES IN APPEAL
11. The essential issue is whether the primary judge erred in exercising the discretion to summarily determine WS 395 of 2020 under Order 12 rule 40(1) of the National Court Rules, which states:
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 the 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.
12. Related issues have been raised by the respondent, who filed a notice of contention under Order 7 rule 29 of the Supreme Court Rules, contending that the primary judge, though correctly deciding to dismiss WS 395 of 2020, erred by failing to find that:
(a) the appellant was obliged to raise the issues that arose in WS 395 of 2020 in OS 478 of 2018;
(b) the appellant was seeking relief in WS 395 of 2020 inconsistent with the relief sought in OS 478 of 2018, to which she had consented;
(c) the appellant was, by bringing WS 395 of 2020, creating the risk that orders would be made that were inconsistent with the relief granted in OS 478 of 2018; and
(d) WS 395 of 2020 was an abuse of process due to (a), (b) or (c).
DID THE PRIMARY JUDGE ERR IN THE EXERCISE OF DISCRETION TO SUMMARILY DISMISS WS 395 OF 2020?
13. In determining whether any error has occurred, some general principles regarding summary dismissal must be considered:
Abuse of process
14. Applying those principles to this case, we find that there is a multiplicity of proceedings regarding the subject matter of WS 395 of 2020, the question of proper administration of the deceased estate of Sir George Constantinou. On the date of hearing of the motion for summary dismissal of WS 395 of 2020, 26 November 2021, there were two other proceedings on the same subject matter that were unresolved:
15. We are satisfied that the appellant has shown good reason for commencement of WS 395 of 2020, notwithstanding that both OS proceedings were unresolved.
16. OS 478 of 2018 was commenced by the respondent under s 46 of the Trustees and Executors Act 1966 seeking the opinion, advice or direction of the Court on a range of questions regarding the estate. It is a discrete proceeding enlivening the jurisdiction of the National Court to provide opinion, advice and directions regarding administration of a deceased estate.
17. Though the subject matter of OS 478 of 2018 is similar to that of WS 395 of 2020, we reject the respondent’s argument that the appellant could and should have agitated the claims made in WS 395 of 2020 as a cross-claim in OS 478 of 2018. That would have been a clumsy step to take as the causes of action being pursued in WS 395 of 2020 require that they be pursued by writ of summons and involve a claim for damages. Further, there are a total of 14 defendants (including the appellant) in OS 478 of 2018, and the appellant is not purporting to represent the interests of any of those other defendants.
18. OS 55 of 2020 is a discrete and separate proceeding commenced by the appellant under s 59(1) of the Wills, Probate and Administration Act and s 48 of the Trustees and Executors Act 1966. Such proceedings are not uncommon especially when there is a protracted delay, as in this case, in finalisation of an estate. The appellant seeks orders for provision by the respondent of an inventory of assets of the estate and audited accounts of the estate. The appellant would not necessarily be obliged to prove negligence or breach of duty on the part of the administrator, those being the causes of action pleaded in WS 395 of 2020.
19. We are satisfied that WS 395 of 2020 pleads causes of action separate to and independently of the causes of action agitated in OS 55 of 2020. The causes of action in WS 395 of 2020 are pleaded to have accrued in the 11-year period between the grant of probate in 2009 and commencement of the WS proceeding in 2020. We uphold the submission of Mr Molloy for the appellant that determination of the causes of action in WS 395 of 2020 is not dependent on the outcome of either OS 478 of 2018 or OS 55 of 2020.
20. We reject the submission of Mr Webb for the respondent that the respondent was unduly prejudiced by the prosecution against him of WS 395 of 2020 while the judgment in OS 478 of 2018 was outstanding. We do not agree that the respondent would be denied the opportunity of pleading as a defence in WS 395 of 2020, any of the directions and retrospective sanctions made in OS 478 of 2018 when judgment was delivered. Such defences remain open to the respondent. Further, there has been substantial agreement between the appellant and the respondent as to what the orders of the National Court should be in OS 478 of 2018. The nature of that agreement has been conveyed to the trial judge in OS 478 of 2018.
21. We find that the learned primary judge erred in finding that the respondent was prejudiced by being required to defend two proceedings, OS 55 of 2020 and WS 395 of 2020, while he was awaiting decisions of the National Court in OS 478 of 2018 and OS 55 of 2020.
22. Any appearance of prejudice that might arise from a cursory examination of the three proceedings is defeated when it is appreciated that the respondent is not actually required to defend more than one proceeding at the same time. The trials in both OS 478 of 2018 and OS 55 of 2020 are completed. The respondent is not required to defend allegations against him in either of those matters any more. He just needs to wait, like the appellant needs to wait, for the judgment of the Court to be given in those matters.
23. We reiterate that we are satisfied that the causes of action pleaded in WS 395 of 2020 are pleaded to have already accrued. They are not dependent on the outcome of OS 478 of 2018 or OS 55 of 2020. If the respondent does not agree with that, he is entitled to plead accordingly in his defence in WS 395 of 2020.
24. We consider that the learned primary judge became distracted by the spectre of prejudice to the respondent. Her Honour should have insisted on there being evidence of actual prejudice to the respondent before taking the drastic step of summarily dismissing WS 395 of 2020.
25. It is ironic that the primary judge praised the respondent at paragraph 22 of her judgment for not leaving his duties as to administration of the estate lie idle, distinguishing the case from others where an administrator has done nothing at all and sat on his hands, when it took the respondent nine years after the grant of probate in 2009 to commence OS 478 of 2018 to seek guidance from the National Court as to administration of the estate.
26. Her Honour failed to give adequate weight to the fact that the bulk of the relief sought by the respondent in OS 478 of 2018 has been consented to by the appellant.
27. We find that the learned primary judge erred in law by failing to take a complete view of the circumstances in which WS 395 of 2020 was commenced and the status of OS 478 of 2018 and OS 55 of 2020. An inadequate assessment of the lack of connection between the three proceedings has led to the erroneous conclusion that WS 395 of 2020 was an abuse of process.
Frivolity
28. The primary judge did not separately address the question of whether WS 395 of 2020 was a frivolous proceeding. Her Honour focussed on the issues of abuse of process and prejudice to the respondent and, having found an abuse of process, jumped to the conclusion that WS 395 of 2020 was also frivolous and vexatious. This is an incorrect process of reasoning. Order 12 rule 40(1) of the National Court Rules provides four separate grounds on which proceedings can be dismissed:
29. The grounds are separate and should not be conflated. They require separate determination. Satisfaction of the court as to one ground, does not necessarily mean satisfaction as to one or more of the others.
30. We see no good reason for concluding that WS 395 of 2020 is obviously untenable or cannot possibly succeed or is in any other respect a frivolous proceeding. We find that the learned primary judge erred in law by finding that WS 395 of 2020 was a frivolous proceeding.
Vexatiousness
31. The learned primary judge made the same error regarding the issue of whether WS 395 of 2020 was a vexatious proceeding. Having found abuse of process, there was an immediate conclusion, without separate consideration of the issue, that WS 395 of 2020 was a vexatious proceeding.
32. There was no good reason for concluding that the appellant commenced WS 395 of 2020 for the purpose of improperly harassing the respondent or prejudicing the respondent’s interests or the respondent’s ability to defend other proceedings. The finding that WS 395 of 2020 was a vexatious proceeding was made in error.
Was there error in the exercise of discretion to summarily dismiss WS 395 of 2020?
33. Yes, the primary judge erred in determining that WS 395 of 2020 was an abuse of process, frivolous and vexatious. None of the four grounds available in Order 12 rule 40(1) for dismissal of WS 395 of 2020 existed. The discretion to dismiss the proceedings was based on wrong principles and failed to take into account relevant considerations. There was no lawful basis on which the discretion to dismiss the proceedings could be exercised. This Court will, in accordance with the principles in Government of Papua New Guinea v Barker [1977] PNGLR 386, set aside the decision to summarily dismiss WS 395 of 2020.
THE RESPONDENT’S NOTICE OF CONTENTION
34. Having regard to our determination that the primary judge erred in the exercise of discretion in summarily dismissing WS 395 of 2020, we determine the issues raised in the respondent’s notice of contention as follows:
(a) the appellant was not obliged to raise the issues that arose in WS 395 of 2020 in OS 478 of 2018;
(b) the appellant was not seeking relief in WS 395 of 2020 inconsistent with the relief sought in OS 478 of 2018, to which she had consented;
(c) the appellant was, by commencing WS 395 of 2020, not creating any material risk that orders would be made that were inconsistent with the relief granted in OS 478 of 2018; and
(d) WS 395 of 2020 is not an abuse of process due to (a), (b) or (c).
CONCLUSION
35. The appeal will be allowed and the orders sought by the appellant in the notice of appeal granted. Costs will follow the event.
ORDER
(1) The appeal is allowed.
(2) The order of the National Court in WS 395 of 2020 of 15 February 2022 including the costs order is quashed.
(3) WS 395 of 2020 is reinstated and remitted to the National Court.
(4) The respondent shall pay the appellant’s costs of the appeal on a party-party basis, which shall, if not agreed, be taxed.
_______________________________________________________________
O’Briens Lawyers: Lawyers for the Appellant
Dentons PNG Lawyers: Lawyers for the Respondent
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