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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA NO 190 OF 2022
BETWEEN
JESSIE YAI-PUPU
Appellant
AND
EMMANUEL YAI-PUPU, the Administrator of the Estate of the late Michael Yai-Pupu
Respondent
Waigani: Makail, J
2022: 29th December
2023: 16th March
SUPREME COURT – PRACTICE & PROCEDURE – Application for interim restraining order and stay – Order sought to restrain dealing with estate of deceased – Order sought to stay proceedings in National Court – Appointment of administrator of deceased estate – Supreme Court Act – Sections 5(1)(b) & 19
DECEASED ESTATES – Deceased dying without will – Appointment of Administrator – Duties of administrator of deceased estate – Wills, Probate, Administration Act, 1966 – Sections 1 & 56 – National Court Rules Order 19, rules 42, 72, 73, 74, 75 & 79
Cases Cited:
Gary McHardy v. Prosec & Communications Limited [2000] PNGLR 279; (2000) SC646
Hon. Havila Kapo, MP v. Hon. Mark Maipakai, MP (2010) SC1067
Amanab Forest Products Limited v. Sai’i (2021) SC2089
Kawari Fortune Resources Limited v. Louis Limbo Apurel (2015) SC1614
Counsel:
Mr. S. Wanis, for Appellant
Mr. A. Mana, for Respondent
RULING
16th March, 2023
1. MAKAIL, J: By an amended application filed 28th December 2022 the appellant seeks an interim order to, amongst others, restrain the respondent, his relatives, agents and servants from entering the company premises of PNG Bottle Industries Limited, Waso Petroleum Limited, Eda Engineering Supplies Limited and Waso Freighters Limited and intimidating or threatening employees, tenants and contractors or service providers and destroying or damaging these companies’ properties pending the determination of the appeal pursuant to Section 5(1)(a) of the Supreme Court Act. The appellant also seeks an order to stay the National Court proceeding WPA No 102 of 2022 pending the determination of the appeal pursuant to Section 19 of the Supreme Court Act.
National Court Application
2. The appeal lies from a final judgment of the National Court given on 2nd December 2022 in respect of a non-contentious application by the respondent to be appointed the administrator of the estate of his late father in WPA No 102 of 2022. The National Court arrived at this decision based on the following information:
(a) The respondent’s father late Michel Yai-Pupu passed away on 25th May 2022. The deceased has a total of 18 children.
(b) Consistent with family consensus, the respondent initiated his application of the relevant estate by advertising a notice of intended application for administration on 25th August 2022 followed by filing the following relevant court documents consistent with the requirements of Order 19 of the National Court Rules (“NCR”) which included amongst others, summons and affidavit of death etc...
(c) A sole objection was received in response to the notice of intended application of 25th August 2022. It was subsequently withdrawn before the final hearing.
(d) The appellant belatedly filed a notice of motion on 17th November 2022 which indicated to the respondent that she was objecting to his application for appointment as administrator of the estate. This was an application for joinder. The respondent had no objection to her joining but advised her to promptly articulate her reasons for objecting, given the urgency of the application.
(e) After at least two or three adjournments, the respondent’s application was heard in a contested hearing on 28th November 2022, with the final judgment delivered on 2nd December 2022.
(f) It was also at hearing that the appellant applied to be joined and was joined pursuant to Order 19, rule 44 (Intervention) of the National Court Rules (“NCR”).
(g) The appellant is one of the wives of the deceased and has four children between them. She is the sole surviving director of PNG Bottle Industries Ltd after the passing of her husband. She is also the signatory to these companies’ bank accounts at BSP Bank, Kina Bank and Westpac Bank. She also claims that she is a guarantor of this company’s bank loan with Kina Bank at a total of K17 million.
(h) She claims that her first born son King Lloyd Yai-Pupu is the General Manager of Waso Petroleum Ltd and her second-born daughter Belladonna Yai-Pupu is the company secretary of these companies. The respondent is and has not been part of the management structure of any of these companies.
(i) She was granted approval by the Public Curator to apply for grant of Letter of Administration (“LA”) of her late husband’s estate and was in the process of filing her application for LA when the respondent filed a similar application without her knowledge.
Principles on Stay and Interim Orders
3. The principles relevant to an application for stay are set out in the often-cited case of Gary McHardy v. Prosec & Communications Limited [2000] PNGLR 279; (2000) SC 646. These are:
(a) Whether there has been any delay in making the application;
(b) Possible hardship, inconvenience or prejudice to either party;
(c) The nature of the Judgement sought to be stayed;
(d) The financial ability of the applicant;
(d) Preliminary assessment about whether the applicant has an arguable case on the proposed appeal;
(e) Whether on the face of the record of the Judgement there maybe indicated apparent error of law or procedure;
(f) The overall interest of justice;
(g) Balance of convenience; and
(h) Whether damages would be sufficient remedy.
4. Learned counsel for the appellant has succinctly addressed each principle in his submissions and need no repetition save to apply them to the facts of the case. As to the principles for interim restraining order under Section 5(1)(b), they are “analogous to the principles of common law on interlocutory injunction orders”. See Hon. Havila Kapo, MP v. Hon. Mark Maipakai, MP (2010) SC1067. These are:
(a) Serious question to be tried.
(b) Balance of convenience lies in favour of granting the interim injunction.
(c) Damages would not be an adequate remedy.
5. The Supreme Court in Amanab Forest Products Limited v. Sai’i (2021) SC2089 adopted the principles set out in Kawari Fortune Resources Limited v. Louis Limbo Apurel (2015) SC1614 where an applicant must answer the following questions:
(a) What are the claims of the parties?
(b) What is the alleged prejudice?
(c) What is necessary, pending the hearing and determination of the appeal to prevent the prejudice?
Consideration of Application for Stay and Interim Orders
6. The filing of the application has been triggered by five controversial events and although not clearly expressed in submissions
by learned counsel for the appellant, two of them were alleged to have occurred prior to the hearing at the National Court while
three of them occurred after the appointment of the respondent as administrator of the deceased’s estate. These are borne
out in the affidavit in support of the appellant filed 7th December 2022, affidavit of Belladonna Yai-Pupu filed 9th December 2022, further affidavit of Belladonna Yai-Pupu filed 14th December 2022, affidavit of Jing Chen filed 8th December 2022 and were not denied by the respondent and are:
Prior to hearing at National Court
(a) Sometime in July 2022, without the authority and approval, the respondent removed and sold a Cat Excavator 300-ton machine belonging to Eda Engineering Supplies Limited for a substantial undisclosed sum of money and converted the proceeds. The matter has been reported to the police and is under investigation.
(b) On 01st August 2022, one of Yai-Pupu’s family relatives identified as Solomon Yombon attacked and wounded Lloyd King. He was arrested and charged by the police and was granted bail. He has since fled to the village in Wapenamanda.
After appointment of administrator of deceased’s estate
(c) attempts by the respondent, his relatives, supporters, and associates to change the company records of each company at the Office of Investment Promotion Authority (“IPA”) where the deceased is a shareholder, the appellant is a sole director and Belladonna is a company secretary including company accounts at Kina Bank and instructions to Westpac Bank to stop the account and change signatories.
(d) On 04th December 2022, Saul Yai-Pupu sent a message via mobile phone to terminate the services of an expatriate Manager and employee of Waso Freighters Limited Mr Nardo Herrera Veraga, and also filed an affidavit in support of the LA application by the respondent.
(e) On 7th December 2022, the respondent gave notice by WhatsApp message to terminate lease agreement between PNG Bottle Industries Limited and Sogo Motors as the current tenant.
7. It is appropriate to determine the application for stay and application for interim restraining order by separating the events that occurred prior to the hearing at the National Court from the events which occurred after the appointment of an administrator of the deceased’s estate. The events which occurred prior to the hearing at the National Court will be relevant to the application for stay because the appellant relied on them to oppose the application for grant of LA at that hearing while those that occurred after will be relevant to the application for interim restraining order.
Application for Stay
8. The application was filed promptly thus delay is not an issue. As to possible hardship, inconvenience, or prejudice to either party, it would be fair to say that the dispute over the administrator of the deceased’s estate has divided the Yai-Pupu family. There is one group led by the respondent which is the bigger group in terms of numbers and the other by the appellant. It would be fair to say that either way, both groups suffers if they choose not to work together to finalise the estate of the deceased.
9. The nature of the judgment sought to be stayed is quiet peculiar in the sense that while it may be categorised as being final in so far as appointment of an administrator is concerned, it is not perpetual because by virtue of Section 65 of the Wills, Probate and Administration Act, 1966 (“WPA Act”) it is open to be revisited by the National Court and the grant of LA in favour of respondent may be revoked. This point will be taken up further when the application for interim restraining order is considered.
10. According to learned counsel for the appellant, the appellant is employed as a senior technical officer and a public health specialist by the World Health Organisation in PNG and earned good pay and has the financial ability to meet any money order that may arise from the order, if granted. Learned counsel for the respondent submits to the contrary. The applicant does not demonstrate that she has financial means and her pattern of withdrawal of funds from company accounts show she could not be trusted. The Court is satisfied that the appellant has a fixed employment with a regular source of income to meet any money order that the Court may make at the end of this proceeding. On the other hand, any assertion that she is not a reliable and trustworthy person and has misused her personal and company funds is unsupported by evidence because there are no bank statements to show how she has applied the funds.
11. From the controversial events which have allegedly occurred prior to the hearing at the National Court outlined above, the National Court was not persuaded by the appellant’s assertion that a police investigation was underway in relation to the respondent’s removal and sale of the excavator machinery, without authority and approval, because it was not verified by a police report or OB number of a police complaint and furthermore, a criminal conviction.
12. Similarly, in relation to the second event which occurred on 01st August 2022, one of Yai-Pupu’s family relatives identified as Solomon Yombon attacked and wounded Lloyd King, the National Court formed a view that the evidence was insufficient to uphold this assertion because there was no police report or OB number of a police complaint and furthermore, a criminal conviction to verify this assertion.
13. Ground 3.9 of the notice of appeal is expressed to challenge this finding. The issue taken up by the appellant in this ground is whether the appellant has established by appropriate evidence that the respondent is not a fit and proper person to be appointed administrator as opposed to the consent given by majority of the children of the deceased to the respondent to be so appointed pursuant to Order 19, rule 25(3)(a) of the NCR.
14. On a preliminary assessment as to whether the appellant has an arguable case, it is arguable whether an assertion of a criminal complaint of a theft and assault or attempted murder to the police required further proof in a form of police report or OB number and a criminal conviction to establish that the respondent is being investigated by the police or in the case of the latter, guilty of a criminal offence, is not a fit and proper person to be appointed administrator. Furthermore, in relation to the second event, the National Court stated that the respondent denied the assertion but from his sworn affidavits, in particular, the one sworn and filed on 17th November 2022, the respondent made no statement denying the assertion. Thus, it is arguable that the Court’s finding was made without any factual and legal foundation.
15. A proof of the allegations of impropriety is an issue worthy of further consideration because ground 4.0 of the notice of appeal is expressed to challenge the finding of the National Court that majority of the deceased’s children consented to the respondent being appointed administrator. This then raises the issue, where the majority of the deceased’s children consented, if proven, whether an applicant who has not satisfied the fit and proper person test should be appointed administrator.
16. In the next ground of appeal at ground 3.8, the appellant alleges that there is no evidence to prove that according to Engan custom of inheritance, where a deceased dies leaving more than one surviving wife and without a surviving first wife, the first son of the first wife is bestowed the right of inheritance. Even if there is evidence to support this custom, it is “not a good custom”. On a preliminary assessment of this ground, the issue is whether the respondent has discharged the onus of proof in establishing that there is such a custom or the evidence must come from a person who is well versed with the Engan custom on right of inheritance as observed by the people of Enga or where the deceased hailed from, for example, a village elder. If it is established that there is such a custom in Enga, is it “not a good custom”?
17. The grounds of appeal nos. 3.1, 3.2, 3.3, 3.4 and 3.7 collectively raise the issue of whether the appellant has been given an opportunity to be heard in relation to the respondent’s application for grant of LA. On a preliminary assessment they will be met with a strong counter argument that the appellant has had adequate time to take up an application for LA in her own right which she did and later withdrew and failed to diligently have her motion for joinder listed and prosecuted on one of the motions days prior to the hearing of the application for grant of LA.
18. Grounds 3.5 and 3.6 of the notice of appeal are not clearly expressed and it is unclear if the appellant is alleging that the National Court has made adverse findings in relation to her marriage to the deceased. Thus, it is not necessary to comment on these grounds. Finally, it is not necessary to comment on ground 4.1 of the notice of appeal because it is vague and ambiguous.
19. In the result it has been established that there is an apparent error of law in the National Court’s assessment of the evidence to support the finding that the evidence adduced by the appellant was insufficient to sustain the assertion in relation to the respondent’s credibility to be appointed administrator and Engan custom on right of inheritance.
20. The interest of justice test will favour the party who has suffered the most harm. According to learned counsel, the appellant stands to suffer the most because she is the sole director of the parent company PNG Bottle Industries Limited and sole signatory to the bank accounts held at three commercial banks. She is also the guarantor to the existing bank loans with the Kina Bank and the current management is serving well. However, there is no submission to show how the appellant has suffered personally. Learned counsel for the respondent does not contest this submission except to submit that the respondent promptly is taking control of the affairs of the estate. However, this submission is unsupported by evidence and is disregarded.
21. It is important to point out the difference between the duties of administrator of deceased estate and duties of director of a company. The matter before the National Court was about a deceased estate. A deceased estate may be made up of personal or real property or both. Where a deceased dies without a will and/or has not appointed an executor, the estate is placed in the hands of an administrator.
22. Amongst the duties, an administrator is to ascertain the debts and liabilities of the deceased, taxes, ascertain and value assets of the deceased and ascertain beneficiaries of the deceased. The administrator is also responsible for distributing the inheritance to the beneficiaries of the estate once all other obligations have been completed. The obligations include settling of the deceased’s debts and liabilities. The respondent has not put any evidence of him attending to these tasks since his appointment. In fact, his counsel concedes that the respondent has yet to call a meeting of creditors and beneficiaries to attend to these matters.
23. On the other hand, matters dealing with the operation and management of the companies lies with the directors and managers of the companies. As there is no contest to the position and role the appellant plays in the operation and management of these companies and only to that extent, she should be allowed to continue without any inference from the respondent.
24. Similarly, for the above stated reasons, the Court is further satisfied that the balance of convenience favours the appellant. Finally, as to the consideration whether damages would be an adequate remedy, there are two aspects to it. Matters that are personal to the appellant and matters that are directed to the operations and management of the companies. The appellant does not state how she has suffered physically and financially, and damages would not be an adequate remedy. As for the companies, learned counsel makes no submissions.
Application for Interim Restraining Order
25. Similar to the reasons given in the case of the application for stay, the Court is satisfied that grounds 3.8, 3.9 and 4.0 of the notice of appeal raise serious issues for determination at the substantive hearing. As to balance of convenience, the respondent does not contest the appellant’s assertions that:
(a) he together with his relatives, supporters, and associates attempted to change the company records of each company at the Office of Investment Promotion Authority (“IPA”) where the deceased is a shareholder, the appellant is a sole director and Belladonna is a company secretary including company accounts at Kina Bank and instructions to Westpac Bank to stop the account and change signatories.
(b) On 04th December 2022, Saul Yai-Pupu sent a message via mobile phone to terminate the services of an expatriate Manager and employee of Waso Freighters Limited Mr Nardo Herrera Veraga, and also filed an affidavit in support of the LA application by the respondent.
(c) On 7th December 2022, he gave notice by WhatsApp message to terminate lease agreement between PNG Bottle Industries Limited and Sogo Motors as the current tenant.
26. The Court accepts that these events occurred after the respondent was appointed administrator. As an administrator, the respondent is supposed to ascertain the debts and liabilities of the deceased, taxes, ascertain and value assets of the deceased and ascertain beneficiaries of the deceased. Not only that but he is also responsible for distributing the inheritance to the beneficiaries of the estate after the deceased’s debts and liabilities are settled.
27. These are by no means easy tasks but onerous ones and must be done responsibly with the deceased in mind because pursuant to Sections 1 and 59 of the WPA Act and Order 19, rule 72 of the NCR, as the administrator, the respondent is required to exhibit on oath in the National Court a correct inventory and account of the property of the deceased. In the case of an account, Section 59 (supra) and Order 19, rules 72, 74, 75, 76 and 79 of the NCR, requires him to file an account within 12 months of appointment and vouch for it. He has neither done that nor reached that point. But the point is, he has a long way to go and if he has not called a meeting with creditors and other siblings to discuss these matters, he has failed in his duty as the administrator. A Court dispensing justice will not endorse a party who has failed to uphold its duty as administrator of a deceased’s estate.
28. It is now necessary to return to the point made earlier that the judgment for the appointment of an administrator is not final or perpetual and that it is open to be revisited by the Court and the grant of LA by virtue of Section 65 of the WPA Act may be revoked at any time on grounds including the administrator being unfit to act, in the office of an administrator. It is an option the appellant may take up where the respondent has acted contrary to the duties of an administrator and not in the best interest of the estate of the deceased. Recourse may be had to Order 19, rule 42 of the NCR, where proceeding may be commenced, by a writ of summons, for revocation of a grant where there is a defendant. Order 19, rule 42 states:
“Commencement of contentious proceedings
Proceedings for revocation of a grant shall, where there is a defendant, be commenced by a writ of summons”.
29. Given the respondent’s failure to ascertain and account for the personal and real property of the deceased, it is not known what they are. What is clear is that the dispute is over the control of the companies in which the deceased was a shareholder. The Court accepts the submissions of learned counsel for the appellant that the companies do not form part of the deceased’s personal estate and pursuant to Section 40(3) of the Companies Act, 1997 it is wrong for a personal representative of the deceased such as an administrator to own shares of the deceased. The shares of a deceased person do not automatically become available for transfer. The residual value of the shares form part of the deceased estate after satisfying all other creditors and liabilities of the deceased and even so, transfer is not automatic without the consent of all legitimate beneficiaries. What the respondent, his relatives, supporters, and associates have done as highlighted in the above events is clearly unlawful and contrary to the operations and management of the companies.
30. While there is no evidence that the appellant has personally suffered, the actions of the respondent, his relatives, supporters, and associates in interfering with the operations and management of the companies is sufficient to warrant the Court’s exercise of discretion in her favour. Similar to the reasons given in the case of the application for stay, there is no evidence by the appellant in relation to whether damages would not be an adequate remedy.
Conclusion
31. The application will largely be decided by the overall interest of justice, where the balance of convenience lies and whether damages would be sufficient remedy. These are settled considerations in an application for interim injunction or restraining order where consideration is given to a serious question to be tried, where the balance of convenience lies and whether damages would not be an adequate remedy. Will the appellant or the respondent be prejudiced if the order sought is granted?
32. The events after the appointment of the respondent as administrator are extremely disturbing and of grave concern. Equally, the Court is mindful of the fact that the deceased’s estate must be administered and concluded expeditiously for the benefit of any creditors and all beneficiaries. If the respondent were to be allowed to perform his duties as the administrator, it must be made clear that he does not cross over into the domain of the directors and managers of the companies.
33. A fair and just outcome is except, to make a decision, in relation to the shares of the deceased held in the companies, he will be restrained from interfering with the operations and management of the companies until the determination of the appeal. As to the role of the director in these companies, being the administrator of the deceased’s estate does not place him higher than the other directors of the companies and he must cooperate with the other directors to call a board meeting and pass resolutions in relation to the future operations of the companies. Taking all these matters into account it is in the interest of justice that the National Court decision should not be stayed.
34. In terms of the details of the orders to be granted, not all of the orders sought in the amended application will be granted because they are either unsupported by evidence or unnecessary. For those that will be granted, some may be reworded to give clarity and avoid uncertainty and doubt.
35. These are as follows:
(a) order sought at paragraph 1 is granted,
(b) order sought at paragraph 2 is granted but reworded.
(c) order sought at paragraph 3 is declined because of lack of evidence.
(d) order sought at paragraph 4 is declined because of lack of evidence.
(e) order sought at paragraph 5 is declined.
(f) order sought at paragraph 6 is declined.
(a) order sought at paragraph 7 is declined.
Order
36. The Court orders that:
8. Costs of and incidental to the application shall be in the appeal.
9. Time shall be abridged.
________________________________________________________________
Solomon Wanis Lawyers: Lawyers for Appellant
Corrs Chambers Westgarth Lawyers: Lawyers for Respondent
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