Hicks Mereke as the representative of the shareholders and next of kins of deceased shareholders of seven former Co-operative Societies of Toaripi area of Gulf Province who held shares in the former Toaripi Association of Co-operative Societies whose names appear in the within claim v Board of Directors of PNG Federation of Co-Operative Associations Ltd (2007) N3203

• Jurisdiction: Papua New Guinea
• Court: National Court
• Judge: Davani J
• Judgment Date: 01 October 2007
• Citation: (2007) N3203
• Judgment Number: N3203
• Year: 2007
• Docket Number: WS 692 OF 2005

Full Title: WS 692 OF 2005; Hicks Mereke as the representative of the shareholders and next of kins of deceased shareholders of seven former Co-operative Societies of Toaripi area of Gulf Province who held shares in the former Toaripi Association of Co-operative Societies whose names appear in the within claim v Board of Directors of PNG Federation of Co-Operative Associations Ltd (2007) N3203

National Court: Davani J

Judgment Delivered: 1 October 2007

N3203

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 692 OF 2005

BETWEEN:

HICKS MEREKE as the representative of the shareholders and next of kins of deceased shareholders of seven former Co-operative Societies of Toaripi area of Gulf Province who held shares in the former Toaripi Association of Co-operative Societies whose names appear in the within claim

Plaintiff

AND:

BOARD OF DIRECTORS OF PNG FEDERATION OF CO-OPERATIVE ASSOCIATIONS LTD

Defendant

Waigani: Davani .J

2007: 16 August

1 October

PLEADINGS – representative action – probate action on deceased person’s estate – endorsement as to capacity to sue – endorsement on writ shall be verified by affidavit – O. 5 r’s 14, 15, 16, 20 of National Court Rules.

PLEADINGS – endorsement on writ, defective – cannot be cured – action to be dismissed.

Cases cited:

Bowler v Mollem Co. Ltd [1954] 3 All ER;

Rus Mongogl v MVIT [1985] PNGLR 300;

Counsel:

E. Kogoro, for the plaintiff

G. Manda, for defendant

DECISION

1 October, 2007

1. DAVANI .J: Before the court is the defendant’s second amended notice of cross motion filed on 17 May, 2007. In that motion, the defendant seeks the following orders;

1. The dismissal of proceedings;

(i) for breach of s.14 (1) and s.15 (1) of the Public Curators Act and s. 44 of the Wills, Probate and Administration Act;

(ii) for non-compliance with O. 4 r. 20 (2) (3) of the National Court Rules;

or alternatively, that

2. The defendant be granted leave to file their Defence out of time.

2. The application is opposed by the plaintiff. Both the counsel rely on several affidavits which I will refer to throughout.

Background

3. By Writ of Summons and Statement of Claim filed on 11 May, 2005, the plaintiff, as next of kin of deceased shareholders, applies for a declaration of trust, an account of property the subject of the trust, an account of the profits, rents, dividends, interests, monies and income received by the defendant on account of the Toaripi Association and its shareholding co-operative societies in respect of the property subject to the Trust and other orders.

4. The plaintiff claims to be the representative of the next of kin of deceased shareholders. The deceased shareholders were shareholders of seven former Co-operative Societies which had shareholdings in the Toaripi Association of Co-operative Societies Limited (‘the Toaripi Association’). The shareholdings and interest of the Toaripi Association have been transferred to the PNG Co-operative Investment Limited (‘PNGCI’) and later to the PNG Federation of Co-operative Association Ltd (‘FCA’).

5. The defendant is the Board of the FCA. This Board was created in the 1940s, by indigenous Papua New Guineans.

6. The claim before the court is in relation to the dividends of the PNGCI. The plaintiff alleges that since its incorporation in 1968 and until its deregistration on or about 2002, PNGCI had not paid any dividends to any of the shareholders of the Toaripi Association and other co-operative societies. The plaintiff claims that since the acquisition of the assets of the PNGCI, the FCA through its defendant board has neglected or refused to notify the shareholders or the next of kin of deceased shareholders of the status of their beneficial ownership of assets held by FCA and controlled by the FCA’s board. The plaintiff alleges that the FCA has not declared any dividends or paid any interest on investments.

7. The defendants deny this claim but did not file a Defence, which is why it now seeks leave to file its Defence out of time.

The applications

8. The defendants submit that according to the Wills, Probate, & Administration Act Chapter 291 (‘WPA’) and the Public Curator Act 1951 (‘PCA’), the plaintiff should have first obtained the Public Curator’s consent prior to filing these proceedings. The defendant submits that this is because the plaintiff’s representative Mr Mereke is suing in a representative capacity for and on behalf of shareholders and the next of kin of deceased shareholders.

9. This then takes me to the issue before the court which is;

1. Whether the proceedings should be struck out for non-compliance with s. 14 (1) and 15 (1) of the Public Curators Act and s. 44 of the Wills, Probate, Administration Act.

10. In this case, it is an undisputed fact that all deceased persons whose claims are being pursued died without leaving wills. In relation to such a scenario, s. 44 of the WPA applies. S. 44 reads;

“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 formally, personal estate in England vested in the Ordinary.”

11. Division 6 of the WPA provides for the manner in which an intestate’s residuary estate will be distributed.

12. Section 14 of the PCA reads;

“14. Taking possession of deceased estates.

(1) Where a person dies leaving property in the country and, as far as the Public Curator or a Public Curator's agent can ascertain—

(a) he left no will; or

(b) he left a will, but no executor was appointed in the will; or

(c) he left a will and an executor was appointed in the will, but the executor—

(i) is dead; or

(ii) is too far from the place where the property or any part of it is situated to be able to take care of it without delay; or

(iii) does not intend, or neglects, to act as executor, the Public Curator, or a Public Curator's agent on his behalf, may immediately and without any order under this Division take possession of the property or any part of it.

(2) When the Public Curator or a Public Curator's agent has taken possession under Subsection (1) of the real estate of a deceased person, he may—

(a) take any steps and incur any expense that he thinks necessary for preserving it or anything in, on, or annexed to it; and

(b) collect and sell any product of it that would decrease in value by being kept, and incur any necessary expense in connection with the collection or sale.

(3) Where the Public Curator or a Public Curator's agent has taken possession under Subsection (1) of the personal estate of a deceased person, he may—

(a) sell or dispose of it, or any part of it, if it appears to him that it will be for the benefit of the estate of the deceased person that he should do so; and

(b) pay out of it, or of the proceeds of it—

(i) the funeral expenses of the deceased person; and

(ii) the expenses incurred in collecting, preserving, selling, or disposing of the personal estate; and

(iii) the expenses incurred under Subsection (2).”

13. In this case, Hicks Mereke is suing in his personal capacity for and on behalf of shareholders and deceased persons. Section 14 of the PCA is clear that in situations where deceased persons died without leaving a will, the Public Curator or his agent may immediately and without any order, take possession of the property or any part of it. But in this case, although the Public Curator is a party to the proceedings (see Court order of 18th July, 2006), he has not made any application to the Court, although s. 10 of the PCA allows him to do that.

14. Additionally, the plaintiff has not complied with the various provisions in the National Court Rules in relation to representative proceedings. These are O. 5 r. (14) (15) (16). Respectively, these rules relate to representation; administration cases etc; trustee, etc; and deceased persons. The more appropriate provision is O. 5 r. 16 which provides that if the estate of a deceased person is interested and that there is no personal representative, that the court may on the application of any party, “order that the proceedings continue in the absence of a person representing the estate of the deceased person or by order (with the consent of the person appointed), appoint a person to represent that estate for the purposes of the proceedings.”

15. I agree with Mr Manda that this has not been done, more particularly O. 4 r. 20 which states that if the plaintiff sues in a...