SC2671
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 184 OF 2022

BETWEEN:
HUMPHREY YUGARI
Appellant

AND:
FRANCIS WARANDUO
First Respondent

AND:
KINA BANK LIMITED
Second Respondent

Waigani: Gavara-Nanu J, Kaumi J & Carmody J
2024: 27th August; 29th November

PRACTICE AND PROCEDURE – Substitution of a deceased party pursuant to Order 5, rules 10 and 12 of the National Court Rules as opposed to an amendment to a Writ of Summons pursuant to Order 8, Rule 50 (1); The Wrongs (Miscellaneous Provisions) Act 1975 reg.34 – the effect of death on certain causes of action; the Fairness of Transactions Act 1993 s7 Mediation; the Constitution s 155

Cases Cited:
Kaidiman v PNG Electricity Commission [2002] PGNC 20; N2343
Singut v Kinamun [2003] PGNC 19; N2499
In Public Officers Superannuation Fund Board and Sailas Imanakuan [2001] PGSC 4; SC677
Kerry Lerro v Philip Stagg, Valentine Kambori & The State (2006) N3590
Philip Takori v Simon Yagari (2007) SC905
Hoveku Pty Ltd & Ors v Watson & Ors [2020] (Un-numbered)

Counsel:
P. Pato, for the Appellant
N. Ako with L. Vira, for the Respondents

29th November 2024

1.    BY THE COURT: 	The Appellant was the Second Plaintiff in National Court proceedings. His mother was the First Plaintiff. The Appellant’s mother died, and the Appellant filed a Notice of Motion seeking to amend the Writ of Summons and Statement of Claim to reflect his appointment as Administrator of his mother’s estate. The National Court refused the application and dismissed the claim.

2.     The primary Judge found that the Appellant was not a party to the proceedings as there was no cause of action between the Appellant and the Respondents. As he had failed to apply to be substituted as a party in his capacity as Administrator of the estate and his application to amend had been refused, her Honour dismissed the claim on the basis that it was frivolous, vexatious and an abuse of the Court process. Summary judgment was then entered against both Plaintiffs in favour of the First Respondent/Cross Claimant. This is an appeal against that decision.

Background Facts

3.    The First and Second Plaintiffs deposed that in 2014 the Appellant’s parents were to enter into a loan agreement with the Second Respondent Bank to buy a property for their business. The Appellant’s father negotiated the terms of the agreement including the repayments and the securities – being three mortgages. The Appellant’s mother took no part in the negotiations and was a “housewife” with no knowledge of commercial transactions although the Respondents averred that she “had or ought to have relevant knowledge” of the negotiations.

4.     On 16 June 2014, prior to the execution of the loan agreement, the father died leaving his wife to care for their four children and run the family business. His wife executed the agreement on 17 December 2014. Mortgages were registered over the three properties. The loan was for K2, 361,000. 

5.    In 2017 the mother was prosecuted for forgery and sentenced to six years imprisonment. The Appellant was left to run the family business, pay all of the family’s living expenses and his mother’s legal fees. His mother’s conviction was overturned in 2018. By then repayments on the loan had fallen into significant arrears. Once released the mother sold one of the mortgaged properties and made a loan repayment of K1.3 million. Notwithstanding that payment the loan remained in arrears.

The National Court Proceedings

6.     The Appellant, acting on behalf of his mother, hoped the Second Respondent would restructure the loan, particularly in light of the substantial repayment by his mother. He attempted to negotiate with the First Respondent, the Second Respondent’s Manager of Asset Recoveries. In seeking a restructure of the loan the Appellant relied on a clause in the loan agreement which stated:

The refinance is to be amortized over a notional term of 10 years with remaining debt to be cleared in full, refinance, [sic] or re-negotiated with the bank after the end of 5 years.

7.     Those negotiations came to naught, and the Second Respondent issued a Notice of Demand. In response the Appellant and his mother commenced proceedings on 5 June 2020 alleging, amongst other things, “unfair transactions” by the Respondents pursuant to s.5 of the Fairness of Transactions Act 1993.

Death of the First Plaintiff

8.     On 22 October 2021 the mother died. On 24 November 2021, his Honour the Deputy Chief Justice made orders as follows:

2. The Second Plaintiff and his client shall resolve the issue of deceased estate administration following the death of the First Plaintiff with the Public Trustee....

4. If deceased estate administration issue is sorted out the Court will issue orders for mediation on the next return date or make such subject (sic) and appoint an administrator of the First Plaintiff’s estate.

9.    It is apparent from those orders that his Honour considered that the inclusion in the proceedings of an Administrator of the First Plaintiff’s estate was a simple procedural formality. This Court is of the same view. This is not what transpired.

The Appellant’s Notice of Motion filed 29 April 2022

10.    The Appellant applied for and was appointed as the Administrator of his mother’s estate on 8 March 2022. He then filed a Notice of Motion on 29 April 2022 seeking leave to amend the Writ of Summons and Statement of Claim to reflect his appointment as the Administrator. He sought the following orders:

Pursuant to Order 8 Rule 50(1) of the National Court Rules, the Plaintiffs be granted leave to file and serve an Amended Writ of Summons with Statement of Claim endorsed thereon within 7 days from the date of the Order.

ii. Costs be in the cause
iii. Any other or further Orders the Court deems fit. 

11.      Order 8 r 50(1) of the National Court Rules 1983 (“NCR”) provides:

The Court may, at any stage of any proceedings, on application by a party or of its own motion, order, on terms that any document in the proceedings be amended, or that any party have leave to amend any documents in the proceedings, in either case in such manner as the Court sees fit. 

12.     The Appellant sought to amend the Writ of Summons by changing the reference to the First Plaintiff from “Rolyn Yugari” to “The Estate of Rolyn Yugari” and the reference to the Second Plaintiff from “Humphrey Yugari” to “Humphrey Yugari as Administrator of the Estate of Late Rolyn Yugari”. 

The Respondent’s Notice of Motion filed 29 April 2022

13.    On the same day that the Appellant filed his Notice of Motion the Respondents filed a Notice of Motion in response. Consistent with their Defence and Cross-claim they sought damages in the amount of K1,890,796.42. 

14.     The relevant orders sought by the Cross-Claimant Bank were as follows:

1.	Pursuant to Order 12 Rule 1 and Order 12 Rule 40 (1)(a), (b) and (c) of the National Court Rules, the proceedings be dismissed for being frivolous, vexatious and an abuse of process;

(a)	In addition and in the alternative, pursuant to Order 5 Rule 12 (1) (a) and (b) of the National Court Rules, the proceedings be dismissed for failing to make substitution of the First Plaintiff within (three) 3 months of the First Plaintiff’s death;

2.	Pursuant to Order 12 Rule 38(1) of the National Court Rules, summary judgment be entered against the First and Second Cross-Defendants, in favour of the Plaintiff for the liquidated sum of K1,890, 796.42. 

15.     Further orders were also sought with respect to the Plaintiffs delivering possession of the mortgaged properties; paying the costs of the proceedings; paying damages and interests on the damages; paying interest on the judgment debt at 9.95%; and various other orders.

16.     Both Notices of Motion were heard on 23 May 2022. Although the Appellant’s Notice was filed first in time the transcript reveals an agreement by counsel that the Respondents’ Application for Dismissal would proceed first. The order in which the Notices of Motion were heard would prove decisive. At the conclusion of the hearing judgment was reserved.

17.     An oral judgment was delivered on 24 November 2022. This Court had the benefit of the transcript which sets out the court’s reasoning.  

The Notices of Motion

18.     The Respondents submitted that the Appellant was required to make an application to be substituted as a party rather than seek leave to amend the Writ of Summons. That was because, it was said, the Appellant, not being a signatory to the loan agreement, had no standing in the proceedings at the outset and therefore no capacity to seek an amendment. The only order that the Appellant could have sought, it was contended, was pursuant to Order 5 rule 10 – an order to be substituted as a party- and the Appellant was out of time unless the Court exercised its discretion to extend the time (Order 5 rule 12). Order 5 rule 10 provides:

(1)	Where a party dies or becomes bankrupt but a cause of action in the proceedings survive, the proceedings shall not abate by reason of the death or bankruptcy.

(2)	Where the interest or liability of a party passes by assignment, transmission, devolution or otherwise to another person, the Court may make orders for the addition, removal or rearrangement of parties and may make orders for the further conduct of the proceedings

(3)	The Court may act under Sub-rule (2) on application by a party or by a person to whom the interest or liability passes or of its own motion.

19.     Order 5 rule 12 contains a three-month limitation period within which to bring an application for substitution of a party:

Order 5, rule 12 – Failure to proceed after death of a party

(1)	Where – 

(a)	A party dies but a cause of action in the proceedings survive his death; and
(b)	An order under Rule 10 for the addition of a party in substitution for the deceased party is not made within three months after the death,

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

20.     The Respondents’ counsel submitted:

.......the second plaintiff is the son of the deceased. He is not a customer of the bank. A contract was entered into between the bank and the first plaintiff as well as the first plaintiff’s late husband. So in that regard,...the second leg of the application to dismiss is on the basis that there is a lack of locus standi. So those are essentially the grounds upon which the dismissal application is made....There is a cross-claim on foot and the defendants seek to have summary judgment entered in the event that the court finds that the proceedings are an abuse of process and is dismissed.
.........
And your Honour will see in order 5, rule 12...specifically provides that substitution must be made within three months. Failure to make a substitution can result in the application being dismissed on application. However, your Honour, there is no dispute that dismissals of this nature are discretionary. The court has power to extend time for an application for substitution to be made. However, in that regard, your Honour, the defendants’ submission is that the exercise in discretion should only be made in circumstances where the party applies for substitution. Ordinarily, these substitutions and as case law as provided, there is a number of case authorities that I have highlighted in my submission. Applications were made for substitution. They were made outside the three months and the court has exercised its discretion to allow the interested applicant to be substituted as a party. However, that is on application of an interested applicant. In this case, your Honour, there has been no application at all and it is on that bases (sic) that the........defendants submit that there is an abuse of process.
.......
.....at the end of the day as submitted, the cause of action is between the bank and the deceased’s customers. In that regard the administrator – although administration has been granted, technically and in accordance with principles of contract does not have standing to sue or enforce on an agreement that it is not a party to.

(underlining by court)

21.     The contention in the last paragraph demonstrates a misunderstanding of the role of an Administrator of an Estate.

22.     The Appellant’s counsel contended that as both the First Plaintiff and the Second Plaintiff were already parties to the proceedings that the Appellant, as the Administrator of his mother’s estate, could simply seek to amend the Writ of Summons and Statement of Claim pursuant to Order 8 rule 50 rather than seek an order for substitution as a party.

23.     The Appellant maintained that the cause of action still existed despite any finding that the Appellant did not have standing. Reliance was placed on the Wrongs (Miscellaneous Provisions) Act 1975, reg 34 (1) which provides that, upon the death of a person “all causes of action subsisting against or vested in him survive against or for the benefit of, as the case may be, his estate” and submitted as follows:

But the important legislation that the court should look at is the Wrongs (Miscellaneous Provisions) Act 1995. Your Honour, section 34 subsection (1) is very clear that, “On the death of a person after 1 January 1963.....(reads).....case may be his estate.” In other words, your Honour, this provision is saying that even if a person who has filed a proceeding may die, the cause of action does not die, it lives on. So your Honour will – in response to my firend’s submission for dismissal of the proceeding for being vexatious and frivolous, he is attesting that part of the submission to the fact that the second plaintiff has no capacity to continue the proceedings. But my friend fails to address the court whether the first plaintiff’s cause of action lives or not. That the applicant has failed to address and I must submit to the court with respect that there is no reason why this court should exercise its discretion to dismiss the proceedings on the basis that the second plaintiff has no capacity to pursue when the law says that the first plaintiff’s estate lives, the cause of action survives. (Court’s underlining)

24.     This Court finds there was much force in that submission.

THE NATIONAL COURT’S DECISION

25.     The Respondents’ submissions were accepted by the National Court. That Court found that no cause of action existed because the Appellant had no standing and had not made an application for submission as a party in his capacity as the Administrator of the First Plaintiff’s Estate. 

26.     The National Court held that is “more or less putting the cart before the horse”.

“..It is not contested that the loan agreements were entered into by the first plaintiff and her late husband with the bank and as of November 2021 the first plaintiff is now deceased. Although the second defendant was...granted letters of administration, it did not apply to substitute the first plaintiff. As such, the claim against the defendant alleging breach of the Fairness and Transactions Act cannot stand because the second plaintiff lacks standing to further pursue this matter as he was not privy to the loan agreements which were entered into between the first plaintiff and the bank. And, as I have already stated, he is a third party.”

27.    The National Court then granted “the first leg” of the Respondents’ Notice of Motion and dismissed the proceedings for being frivolous, vexatious and an abuse of process:

The constitutional right to be heard cannot be lightly set aside that the discretion to be exercised must be exercised in the clearest of cases. The rules provide a safeguard against the views (sic) of process and the object of the rules is to stop cases which are obviously frivolous or vexatious or unsustainable. Where a deficiency in pleadings can be cured by an amendment to the pleadings, the application should be refused unless it is clear that no amendment would entitle the plaintiff to what he seeks. I am satisfied that the claim in my view is frivolous and vexatious and untenable as it currently stands and I therefore grant the first leg of the defendants notice of motion which is contained in term 1 of the motion.

28.     The National Court then turned to “the second leg” of the Respondents’ application being an application for summary judgment and concluded that “Having considered the cross-claim as well as the cross-defence and the evidence before me” I am of the view that “there is no defence on the merits” and “The second plaintiff is not a (sic) privy to the agreement hence as I have held lacks standing to further pursue this matter”. 

29.     The Court then entered judgment in the Respondents’ favour and made the following orders:

i.	The Second Plaintiff’s Notice of Motion filed 29th April 2022 seeking leave to amend the pleadings is refused.

ii.	The Plaintiff’s claim is dismissed for being frivolous, vexatious and abuse of the Court process pursuant to Order 12 rule 40 (1)(a), (b) and (c) of the National Court Rules.

iii.	The Plaintiff’s claim is also dismissed pursuant to Order 5 rule 12 (1)(a) and (b) of the National Court Rules for failing to make substitution of the First Plaintiff within three (3) months after her death.

iv.	Pursuant to Order 12 rule 38 (1) of the National Court Rules, summary judgment is entered against the First and Second Cross-Defendants, in favour of the Cross-Claimant, for the liquidated sum of K1,890,796.42.

v.	Pursuant to Order 12 rule 30 of the National Court Rules, an order that the Plaintiff/Cross-Defendants deliver possession of the properties described as; (a) whole of the land contained in State Lease Volume 10 Folio 88 and more particularly known as Allotment 29, Section 276, Hohola, National Capital District (Property 1); (b) whole of the land contained in State Lease Volume 72 Folio 68 and more particularly known as Allotment 5 Section 259, Hohola, National Capital District (Property 2); (c) whole of the land contained in State Lease Volume 6 Folio 40 and more particularly known as Portion 2162 (Property 3). 

vi.	Pursuant to Order 13 Rule 3(2) of the National Court Rules, an order that leave is granted to the Cross-Claimant to issue a Writ of Possession over Property 1, 2 and 3.

vii.	Pursuant to Order 14 Rule 33 and 34 of the National Court Rules; (a) The Cross-Defendants shall deliver possession of Property 1 and 2 to the Cross-Claimants; (b) Property 1 and 2 shall be sold by the Cross-Claimants or the Cross-Claimants agent at market price; (c) The Cross-Claimants shall apply the proceeds of the sale of Property 1 and 2 to satisfy the Cross-Claimants’ claim for damages, costs and interests owing to the time of sale, with the balance, if any to be paid to the Second Cross-Defendant/First Plaintiff who has been  granted letters of administration by the Court over the First Cross-Defendant/First Plaintiff’s estate.

viii.	The Plaintiffs/Cross-Defendants are ordered to pay the Cross-Claimants’ costs of and incidental to this proceeding pursuant to the loan agreement.
ix.	Pursuant to the loan agreement, the Plaintiffs/Cross-Defendants are ordered to pay interest on the judgment sum, to be calculated from the date of filing of the Cross-Claim up to the date of judgment, to be calculated at the rate of 9.95 %.

x.	File is closed, subject to any of enforcement proceedings.

 30.     The consequences of those orders upon the deceased’s Estate were no doubt significant.

THE APPEAL
The Appellant’s Grounds of Appeal

31.     At the outset of the hearing the Appellant abandoned one ground of appeal and focussed, in particular, on the National Court’s finding that the Appellant had no standing and should have filed an application for substitution of a party rather than seeking leave to amend. The Appellant argued that pursuant to Order 5 rule 12(1) the National Court had the power to, and should have, directed the Appellant to make an application for substitution if it found the Appellant’s application seeking leave to amend was misconceived. 

32.     The Appellant further submitted that the National Court erred in law by failing to recognise that, pursuant to the Wrongs (Miscellaneous Provisions) Act 1975, the First Plaintiff’s cause of action survived her death despite there being no cause of action between the Appellant and the Respondents. 

33.     Further, the Appellant contended that the Court should have exercised caution before dismissing the claim and that was particularly so where the Court was already seized of the matter and the amendments sought by the Appellant were consistent with the intent of the Deputy Chief Justice’s orders of 24 November 2021.

The Respondents’ Submissions in Response

34.    The Respondents’ submissions were that the primary Judge correctly refused the Appellant’s Notice of Motion as the Appellant should have made an application for substitution under Order 5 rule 12 (1) (a) and (b).

35.     The Respondents relied on Hoveku Pty Ltd & Ors v Watson & Ors [2020] (Un-numbered) as authority for their submissions. In that case there was a reference to an application to amend rather than an application for substitution as being “misguided”. It was also argued that the Appellant had failed to bring the substitution application within the requisite three months although it was conceded that was not a mandatory requirement. 

36.     The principal argument was that there was no cause of action and the primary judge was correct in finding that “claim against the defendants cannot stand because the second plaintiff lacks standing to further pursue this matter as he was not privy to the loan agreements which were entered into between the first plaintiff and Kina Bank, out of which agreement the cause of action arises”. 

37.    The Respondents concluded that it was entitled, pursuant to Order 12 rule 40 (Frivolity, etc) “to make an application for dismissal of the proceedings for failure to substitute, pursuant to Order 5 rule 12(1)” of the NCR.

THE COURT’S DECISION

38.     As earlier stated, the Respondents relied on Hoveku Pty Ltd & Ors v Watson & Ors [2020] (supra) as authority for the submission that the Appellant’s application to amend was “misguided”. This Court finds that the reference to “misguided” contained in Hoveku Pty Ltd is directed to the distinction between Order 8 rule 50 (1) and Order 8 rule 50 (3) – the distinction being that the former addresses a general amendment while the latter addresses a mistake in the name of a party.

39.     Nevertheless, the following statement from Hoveku Pty Ltd is relevant:

While Probate is granted by the National Court and this proceeding is instituted in the National Court, there is no cross-reference of the files. Thus, the information in the Probate does not cause a change in the citation of the proceedings, even though by law the Executor is empowered to represent the deceased’s estate. An application for change of a deceased’s party’s citation is pursuant to Order 5 rule 10 NCR....

40.     The Appellant’s decision to seek leave to amend the Writ of Summons and Statement of Claim was no doubt predicated on the belief that the Appellant was already a party to the proceedings and that a change in the citation simply reflected his capacity to conduct the proceedings as the Administrator of his mother’s estate.

41.     However, as it eventuated, the National Court determined that the Appellant was not, and never had been, a party due to his lack of standing. That is a decision with which this Court agrees. However, that does not mean that was the end of the matter and that the proceedings should have been dismissed.

42.     Quite the contrary. The cause of action between the deceased First Plaintiff and the Respondents remained on foot despite the finding with respect to the Appellants. Both Order 5 rule 10(1) of the National Court Rules and the Wrongs (Miscellaneous Provisions) Act 1975 refer to a cause of action which “survives” the death of a party. Order 5 rule 10(1) states that “Where a party dies or becomes bankrupt but a cause of action in the proceedings survives, the proceedings shall not abate by reason of the death or bankruptcy”. 

43.     Part V of the Wrongs (Miscellaneous Provisions) Act 1975 – Survival of Causes of Action (“the Act”) refers to the survival of a cause of action. Regulation 3 is headed “Effect of Death on Certain Causes of Action” and relevantly states:

(1)	Subject to this section, on the death of a person after 1 January 1963 (being the date of commencement of the pre-Independence Law Reform (Miscellaneous Provisions Act 1962) all causes of action subsisting against or vested in him survive against or for the benefit of, as the case may be, his estate. 

44.     Regulation 34 (2) sets out the causes of action and categories of damages which fail to “survive” the death of a party. They include causes of action for defamation or seduction or claims for damages on the ground of adultery. The causes of action pleaded in these proceedings pursuant to the Fairness of Transaction Act 1993 was not excluded and survived the First Plaintiff’s death.   

ERROR OF LAW IN FINDING NO CAUSE OF ACTION EXISTED

45.     As set out above the National Court erred in finding that no cause of action existed. Absent the Appellant, the deceased First Plaintiff’s cause of action remained. That is so because Order 5 of the National Court Rules specifically addresses the issue of the death of a party. Order 5 is headed “Parties and Causes of Action”. Division 1 is headed “Joinder of Causes of Action and Parties”. Order 5 rule 10 is headed “Death, transmission, etc” and states:

(1)	Where a party dies or become bankrupt but a cause of action in the proceedings survive, the proceedings shall not abate by reason of the death or bankruptcy.

(2)	Where the interest or liability of a party passes by assignment, transmission, devolution or otherwise to another person, the Court may make orders for the addition, removal or rearrangement of parties and may make orders for the further conduct of the proceedings.

(3)	The Court may act under sub-rule (2) on application by a party or by a person to whom the interest or liability passes or of its own motion. 

46.     Order 5 rule 10(3) specifically provides for a Court to make such an order of its own motion. The primary Judge should have, of her own motion, added the Appellant as a party to the proceedings in the interest of justice, in his capacity as Administrator of his mother’s estate rather than dismiss the proceedings and enter judgment in favour of the Respondents/Cross-Claimants.

47.     It was also open to the National Court to make such an order in the interests of justice pursuant to s155 of the Constitution. That was the course adopted in Public Officers Superannuation Fund Board and Sailas Imanakuan [2001] PGSC 4; SC677 in order to facilitate a fair and prompt determination of that dispute.   

48.     This Court notes that the National Court dismissed the claim on the basis that it was “frivolous, vexatious and an abuse of the Court process” despite the long-established principles governing the dismissal of proceedings. In the above referred case of Public Officers Superannuation Fund Board and Sailas Imanakuan, a case not dissimilar to the one before this Court, there had been a failure to apply, within 3 months, for substitution of a party following the death of the original party. The Supreme Court noted the trial judge’s reference to s155 of the Constitution and his statement that “in the interest of doing justice in the circumstances of the case Mr Imanakuan should be ordered to substitute his deceased wife”. The Court held:

“We find nothing wrong with that. In any case, O1 r 7 of the NCRs, compliments s155 of the Constitution by giving the Court power to dispense with a non-compliance of the rules either before or after the need to do so has arisen in the interest of justice. It is now settled law that, the Rules of the Court are not an end in them (sic) but a means to an end in all matters going before the Courts. They are only a code of practice and there is no doubt where justice so requires, strict adherence to the rules can be dispensed with in the circumstances of a particular case......It should be borne in mind that,  the Rules are designed to guide and assist the Courts and the parties to reach a fair, orderly and expeditious resolution of matters before the Courts. Their application was thus intended to be flexible: See Andrew Kimberi of Paulus & Dowa Lawyers v The State (unreported Judgment of the Supreme Court delivered in 1988) SC545 at page 22. This compliments the provisions of s155 of the Constitution”. 

49.     In stating the above this Court accepts that the amendments sought by the Appellant were incorrect. The Appellant sought to maintain both the Estate of the deceased mother as the First Plaintiff and the Appellant as a Second Plaintiff in his role as Administrator of that Estate. Instead, the references to the First and Second Plaintiff should have been deleted and in their place “Humphrey Yugari as Administrator of the Estate of Late Rolyn Yugari” should have been inserted as the sole Plaintiff. 

50.  Notwithstanding the inaccuracy of the amendments sought by the Appellant, given the existence of Order 5 rule 10 (3) of the National Court Rules and s155 of the Constitution the National Court erred in dismissing the Appellant’s claim and then entering judgment on the counter-claim in favour of the Respondents in the amount of K1,890,796.42 along with the delivery up of the mortgaged properties and costs.

ERROR OF LAW IN DISMISSING THE CLAIM AND ENTERING JUDGMENT IN FAVOUR OF THE RESPONDENTS

51.     It is of considerable concern to this Court that the National Court so readily dismissed the Appellant’s claim and, further, awarded judgment in favour of the Respondents in circumstances where a party had died, and her son simply wished to continue the claim on behalf of the estate. The Appellant as Administrator of his mother’s estate was effectively driven from the judgment seat in a summary way without a court considering his right to be heard. (See paragraph 53 below).

52.     Kerry Lerro v Philip Stagg, Valentine Kambori & The State (2006) N3590, a decision from almost twenty years ago, remains one of the leading authorities with respect to dismissing a proceeding pursuant to Order 12 Rule 40 (1):

40 Frivolity, etc (13/5)

(1)	Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings – (a) no reasonable cause of action is disclosed; or (b) the proceedings are frivolous or vexatious; or (c) the proceedings are an abuse of 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.

53.     The principles enunciated in Kerry Lerro were succinctly addressed in Philip Takori v Simon Yagari (2007) SC905 at paragraph 23 relevantly include (with footnotes and citations deleted):

“23. The starting point of course is, O 12 r 40 of the Rules as interpreted and applied by the Courts. The principles built around this provision are now well established. The National Court in Kerry Lerro trading as Hulu Hara Investments Ltd v Philip Stagg, Valentine Kambori and the Independent State of Papua New Guinea (2006) N3950 extracted the relevant principles from a number of overseas and our own Supreme and National Court judgments in this way:

1.	Our judicial system should never permit a plaintiff or a defendant to be “driven from the judgment seat” in a summary way “without a Court considering his right to be heard”.
2.	 At the same time however, the law, such as the Rules under consideration, provide for and the Court has an inherent jurisdiction to protect and safeguard against any possible abuse of the process of the Court.
3.	The object of these rules are therefore “to stop cases which ought not to be launched – cases which are obviously frivolous or vexatious or obviously unsustainable”. 
 .............
6.  With regard to the issue of disclosing a reasonable cause of action or defence, the Court must be clear that, there are two parts to the phrase ‘cause of action’. First, it entails a right given by law, such as an entitlement to reasonable damages for breach of human rights under s58 of the Constitution, commonly referred to as, the ‘form of action’. Secondly, it entails the pleadings disclosing all the necessary facts which give rise to the form of action”. 

54.     As the National Court had determined that no cause of action existed between the Appellant and the Respondent the above principles were only briefly considered by that Court. However, the importance of those principles should, at the very least, alert a Court to the care which should be exercised when considering an order to summarily dismiss proceedings. It is for that reason that this Court makes particular note of the fact that the decision of the National Court makes no reference to the Wrongs (Miscellaneous Provisions) Act 1975 despite that being a significant submission by the Appellant at the hearing of the Notice of Motion.

55.     In conclusion it is this Court’s determination that the National Court’s finding that there was no cause of action was an error of law such that this appeal must be upheld.

ORDERS OF THE COURT

1.	The appeal is upheld.
2.	The Orders of 24 November 2022 relating to proceedings WS (Comm) No. 13 Of 2020 are quashed.
3.	The Proceedings WS(Comm) No 13. Of 2020 are reinstated.
4.	The Court directs that in proceedings WS (Comm) No.13 of 2020 the name “Rolyn Yugari” as the First Plaintiff and “Humphrey Yugari” as the Second Plaintiff be deleted and “Humphrey YUGARI as Administrator of the Estate of Rolyn YUGARI” as the Plaintiff be substituted in their place.
5.	The Appellant is granted leave to amend the Writ of Summons and the Statement of Claim within 14 days of the date of service of these Orders.
6.	The matter is remitted to the National Court to be tried before another Judge.
7.	The Respondents shall pay the Appellant’s costs of and incidental to this appeal which are to be taxed, if not otherwise agreed.
________________________________________________________________
Parker Legal:	Lawyers for the Appellant
 O’Briens Lawyers: Lawyers for the Respondents