IN THE HIGH COURT OF TUVALU

CIVIL JURISDICTION

CASE NO. 30/03

IN THE MATTER OF the Estate of the late Elia Teborata (deceased)

AND IN THE MATTER OF the Administration of Native Estates Regulations

AND IN THE MATTER OF an application by Alpha Pacific Navigation Ltd

BETWEEN:

Alpha Pacific Navigation Ltd
Applicant

AND:

The Administrator of Native Lands
Respondent

James Duckworth for applicant
Attorney General for respondent

Hearing: 22 September 2003
Judgment: 26 September 2003

Judgment

The deceased, Elia Teborata, died of natural causes on 21 April 2003 whilst working for the applicant company. He was working on contract the terms of which followed those of a collective agreement between the Tuvalu Overseas Union and South Pacific Marine Services.

Article 22(1) of the agreement provides:

"(1) If a Seafarer dies through any cause whilst in the employment of the Company including death from natural causes ... the Company shall pay the sums specified in the attached Annex 3 to a nominated beneficiary and to each dependent child up to a maximum of 3 under the age of 21. If the Seafarer shall leave no nominated beneficiary, the aforesaid sum shall be paid to the person or body empowered by law or otherwise to administer the estate of the Seafarer."

The provisions of Annex 3 include:

"Death in service benefits as provided in Article 22 of this Agreement shall, unless more favourable benefits are negotiated, be:

To the nominated beneficiary ………………………………………….. $60,000
To each dependant child (maximum 3 under the age of 21) …………... $15,000
Denomination US$"

The deceased left no will and neither had he nominated a beneficiary. He was a native of Tuvalu so his estate falls to be administered in accordance with the Administration of Native Estates Regulations. He also left two dependant children, Ioane and Lafoga, aged at the time of his death, 12 and 6 years respectively, each of whom will receive $15,000 under the agreement.

It appears that in previous cases the whole sum has been ordered by the Lands Court to be paid to the nominated beneficiary including the money for the children. The applicant by motion seeks clarification of its obligation under the agreement. It appears the insurers and the P+I club have requested this in an attempt to ensure that the intention of the agreement is achieved. The applicant suggests the plain intention is for the money to be received for and on behalf of the children alone.

The position in relation to the sum which would have been due to a nominated beneficiary is that it becomes part of the deceased's estate and will be administered in accordance with the Regulations.

Regulation 3 sets out the duties of the administrator which include:

"3(1) The administrator shall -

(a) receive all the property of the deceased person both movable and immovable and hold the same as trustee until a final distribution is made;

(b) apply to the lands court for directions as to the distribution of the deceased person's estate and shall comply with all such directions and with all directions as to distribution of the deceased person's estate given by any tribunal on appeal from a judgment, decision or order of the lands court:..."

The status of the money due to the children lies in the terms of article 22 and Annex 3.

Article 22 places an obligation on the company to pay the stated sums to identified individuals in the event of the death of the Seafarer. That obligation arises on his death and is an obligation of the company to the beneficiaries. If no beneficiary has been nominated by the seafarer, the company can only pay the first sum in Annex 3 in the manner required by the last sentence of the article. During his life, the disposition of that sum is in the control of the seafarer and, if he makes no disposition, it will become part of his estate on his death.

In the case of the children, the terms of article 22 clearly identify them without any need for the seafarer to nominate them. The entitlement to that money arises from the fact they are dependant children and the obligation on the company is to those children. I do not accept that part of the money ever forms part of the deceased's estate. He has no power during his life to assign the right, refuse it or deal with it in any way. The entitlement arises on his death but it is never part of his property or under his control in contrast to the money due to the beneficiary over which he has control by nomination. The sum is due as a direct payment to each child and is not part of the deceased's estate and cannot be dealt with as such. It is not, for example, available for the payment of debts due from the deceased's estate.

Therefore, in a case such as this where the Lands Court will direct the administration of the deceased seafarer's estate including the sum that the deceased could have nominated, I direct that the money due to the dependant children is not part of the deceased's estate and its administration will not be under the direction of the lands court.

That leaves the question of how and by whom the funds shall be administered during the children's' minority. The Attorney General and the Administrator of Native Estates agree that the latter is the most suitable person to administer these funds on behalf of the children. I agree.

I therefore order that the sums of US$15,000.00 due each to Ioane Tepolata, born on 13 September 1990, and to Lafoga Tepolata, born on 7 February 1997, be paid to the Administrator of Native Estates who shall hold them in trust for the children until they reach the age of 21 years. The opportunities for safe investment in Tuvalu are negligible and I direct the money shall be placed in a separate interest bearing deposit account with the Bank of Tuvalu for each child. No alternative form of investment shall be undertaken without the prior leave of the High Court.

Should any application be made by the children for payment of any part of those sums, the Administrator shall decide in the best interests of the child considering its age, need and the nature of the request. No payment shall be authorised that, in the opinion of the Administrator, would solely or principally be for the purpose of relieving the mother or guardian of the child of their normal obligations to maintain that child.

If the administrator has any doubt about the propriety or the proper determination of any such request, he shall apply to the High Court for further directions.

Dated this 26th day of September, 2003.

THE COURT.