Sakaraias Akap in substitution for Kandaso Akap v Kenneth Korakali and Teddy’s Plant Hire Limited and Teddy’s General Stores Limited (2012) SC1179

• Jurisdiction: Papua New Guinea
• Judge: Mogish, Yagi & Makail, JJ
• Judgment Date: 26 April 2012
• Court: Supreme Court
• Citation: (2012) SC1179
• Docket Number: SCA NO 82 OF 2007
• Year: 2012
• Judgement Number: SC1179

Full Title: SCA NO 82 OF 2007; Sakaraias Akap in substitution for Kandaso Akap v Kenneth Korakali and Teddy’s Plant Hire Limited and Teddy’s General Stores Limited (2012) SC1179

Supreme Court: Mogish, Yagi & Makail, JJ

Judgment Delivered: 26 April 2012

SC1179

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO 82 OF 2007

BETWEEN

SAKARAIAS AKAP

IN SUBSTITUTION FOR KANDASO AKAP

Appellant

AND

KENNETH KORAKALI

First Respondent

AND

TEDDY’S PLANT HIRE LIMITED

Second Respondent

AND

TEDDY’S GENERAL STORES LIMITED

Third Respondent

Waigani: Mogish, Yagi & Makail, JJ

2009: 26th November & 2012: 26th April

PRACTICE & PROCEDURE - Dismissal of proceedings - Exercise of discretion - Cause of action - Agreement based on custom - Money received as compensation for personal injury sustained in a motor vehicle accident - Enforceability of agreement - Authority to issue proceedings - Deceased party - Survival of cause of action - Substitution of deceased party - Failure to apply - Effect of - Proceedings incompetent and abuse of process - Discretion properly exercised - Appeal dismissed- National Court Rules - O 5, rr 10 & 12, & O 12, r 40.

PRACTICE & PROCEDURE - Notice of motion - Motion for dismissal of proceedings - Time for hearing - Short service - Hearing of motion at date of trial - Hearing by consent of parties - Effect of - Waiver of right to adjournment - Inherent powers of Court - Hearing of application may be heard on short notice - National Court Motions Amendment Rules 2005 - O 4, r 49(11).

Facts

Kandaso Akap and his wife Pokawan Kandaso who at all material times was a paraplegic held interests in the respondent companies. They commenced proceedings in the National Court to have the respondents account for profits made from business operations of the second and third respondents and for damages. The action was based on breach of contract and customary law. It arose from a dispute over money paid as compensation by the Motor Vehicle Insurance Trust to Pokawan Kandaso following injury she sustained in a motor vehicle accident that rendered her a paraplegic. The parties are from Enga Province and are related by blood and through marriage. Pokawan Kandaso shared her compensation money with these relatives and started successful business in the respondent companies.

On the respondents’ motion seeking dismissal of the proceedings, the National Court dismissed the proceedings holding that:

1. Pokawan Kandaso had not authorised the issuance of the proceedings;

2. she died and was without a substitute; and

3. the agreement to share compensation intended under a statutory scheme and awarded by a Court to her as a paraplegic was unenforceable.

On appeal, the appellant argued among other reasons, that the primary judge erred when; (a) he heard the application for dismissal on short notice at the date of trial, thus denying the appellant a fair hearing, (b) the proceedings was an abuse of process when Enga custom permitted him to be and was granted substitution of Kandaso Akap and Pokawan Kandaso; and, (c) he was entitled to benefit from the money paid as compensation to Pokawan Kandaso by Motor Vehicles Insurance Trust.

Held:

1. The relevant Rule that prescribed the time for the hearing of a notice of motion stipulate that a motion may be moved or heard not less than 3 clear days after service. In the present case, the appellant’s counsel consented to the hearing of the application on short notice at the date of trial. Therefore, the appellant had waived his right to an adjournment of the hearing of the application and the primary judge had not erred when he heard the application on short notice: O 4, r 49(11) of the National Court Motions Amendment Rules 2005.

2. There was no evidence supporting the appellant’s submission that the issues raised in the respondents’ application were determined in an earlier ruling, hence res judicata.

3. In a case where a plaintiff dies but the cause of action in the proceedings survives his death and an application for substitution of the deceased plaintiff is not made within 3 months preceding the death, the proceedings may be dismissed as being incompetent and an abuse of process: O 5, r 12(1) & O 12, r 40(1)(c) of the National Court Rules.

4. An application for substitution of a deceased party may be made after 3 months had expired and the party making the application must provide a reasonable explanation for the delay in making the application. In a case where no attempts are made or the explanation is unsatisfactory, the application may be refused: Thomas Kaidiman -v- PNG Electricity Commission (2002) N2343 and POSFB -v- Sailas Imanakuan (2001) SC677 referred to.

5. The primary judge had not erred when he dismissed the proceedings for failure to disclose a cause of action, frivolous and vexatious and an abuse of process.

6. Appeal is dismissed with costs. The decision of the National Court is affirmed.

Cases cited:

Papua New Guinea cases:

Curtain Bros (PNG) Ltd -v- UPNG (2005) SC788

The State -v- Sam Akoita & Others (2009) SC1016

Telikom Limited -v- ICCC (2008) SC906

Robert Kalasim & Anor -v- Aina Mond & Ors (2006) SC828

Thomas Irai -v- The State (2007) SC687

John Baipu -v- The State (2005) SC796

Thomas Kaidiman -v- PNG Electricity Commission (2002) N2343

POSFB -v- Sailas Imanakuan (2001) SC677

Overseas cases:

House -v- King (1936) 55 CLR 499

Counsel:

Mr R Mann-Rai, for Appellant

Mr G Sheppard with Ms S Nepal, for Respondents

26th April, 2012

JUDGMENT

1. BY THE COURT: The appellant appeals against the interlocutory judgment of the National Court of 24th July 2004 in relation to proceedings WS. No. 1661 of 2002; Sakaraias Akap (substituting Kandaso Akap) & Pokowan Kandaso -v- Kenneth Korakali & Ors. The appeal lies without leave because the interlocutory judgment was final in nature pursuant to section 14 (3) (b) (iii) of the Supreme Court Act, Ch. No. 37.

Background Facts

2. The proceedings in the National Court was based on a combination of contract law and customary law. The second plaintiff Pokawan Kandaso, who is now deceased, was injured in a motor vehicle accident and rendered a paraplegic. In separate National Court proceedings, she successfully sued and received compensation from the Motor Vehicle Insurance Trust (“MVIT”) in 1992 a sum of K100,365.00 (K95,000.00 after legal costs were paid). The parties in the National Court are from Enga Province and related to Pokawan Kandaso either through marriage or by blood. They met and agreed in accordance with what is claimed as their custom, to share the compensation money among themselves including Pokawan Kandaso. Pokawan Kandaso, who was then hospitalised, was allocated K15,000.00 as her share. Others were also allocated various share amounts. The share agreement then became a vehicle for the establishment of business. Each party’s interest in the business was proportionate to each party’s share in the compensation.

3. A construction company was thus established in 1993 by the first respondent, who was an accountant by profession and the business became profitable and a successful venture. A dispute subsequently arose among them. Kandaso Akap and Pokawan Kandaso therefore instituted an action for account in the National Court to essentially get the respondents to, among other things, account for all the company’s profits since its establishment in 1993. While the proceedings was pending, Pokawan Kandaso died. Subsequently, Kandaso Akap also died. He died on 03rd August 2004. The National Court subsequently granted leave for the appellant to be substituted for Kandaso Akap as the plaintiff to pursue the proceedings.

4. The respondents denied the claim and raised as their defence firstly, the first respondent had been running as a successful business venture prior to the share agreement and hence denied owing to Kandaso Akap and Pokawan Kandaso any profits of the business. Secondly, all parties were paid their entitlements pursuant to the share agreement. Thirdly, Pokawan Kandaso did not authorise the issuance of the proceedings prior to death and therefore was without a substitute to maintain the proceedings.

5. On 16th July 2007, the respondents moved a motion seeking dismissal of the proceedings on various grounds. The National Court dismissed the proceedings as failing to disclose a cause of action, frivolous and vexatious and an abuse of process holding that:

(a) Pokawan Kandaso did not authorise the issuance of the proceedings;

(b) she died and was without a substitute; and

(c) the agreement to share compensation intended under a statutory scheme and awarded by a Court to her as a paraplegic was unenforceable.

The Law

6. The appeal is against the primary judge’s exercise of discretion in dismissing the proceedings. In appeals against an exercise of discretion, it is the law that an appellant bears the onus of establishing that the Court below made an error in the exercise of its discretion in dismissing the proceedings. It is not sufficient to show that the primary judge should have found otherwise. In ...