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Graham v Klatt [2021] PGNC 204; N8926 (22 July 2021)

N8926

PAPUA NEW GUINEA
[IN THE NATION COURT OF JUSTICE]

WS NO. 172 OF 2020

BETWEEN
CATHERINE GRAHAM
First Plaintiff

AND
DARRYL JEE
Second Plaintiff

AND
MICHAEL KARL KLATT as Administrator of the Estate of
Fook Neng Jee (Deceased)
Defendant

Waigani: Thompson J
2021: 19^th & 22^nd July

PRACTICE AND PROCEDURE – SUMMARY DISMISSAL – O12 r40 – relevant principles − whether statutory time-bar can be determined at interlocutory stage – requirement for statement of claim to plead legal elements and facts giving rise to cause of action – date when cause of action arose – ss 60, 124 – 126 of Wills Probate and Administration Act – s 19 Frauds and Limitations Act
Counsel:

Mr. D Kipa, for the Plaintiffs
Mr. I R Shepherd, for the Defendant

22^nd July, 2021

1. THOMPSON J: This is an application by the defendant under O 12 r 40, to dismiss the proceedings for failing to disclose a reasonable cause of action.

2. The Supreme Court in many cases including Phillip Takori v Simon Yagare (2008) SC 905 has set out the principles to be applied in such applications.

3. The object of O 12 r 40 is to stop cases which are unsustainable, and where it is obvious that the claim cannot succeed. The statement of claim must plead all the legal elements and facts giving rise to the cause of action and enable the defendant and the court to identify the relevant issues and know what case the defendant has to meet. If the defendant is left to guess what are the elements of the cause of action, the claim should be struck out. This should only occur in plain and obvious cases, so that the court’s discretion should be exercised sparingly. If the deficiencies in the claim can be cured by particulars, then the claim should not be struck out, and further particulars should be ordered to be provided.

4. If the statement of claim, even if proved, will not entitle the plaintiff to the relief sought, it should be struck out. However, the plaintiff will not be driven from the judgment seat unless the case is unarguable.

5. The first plaintiff is the daughter, and the second plaintiff is the grandson, of the deceased who died in 1998. While the plaintiffs claim a number of declarations by way of relief, with the exception of one ground, the legal basis on which they claim to be entitled to that relief, is not pleaded. They plead some alleged facts which they say make it unfair for them not to be given the relief, but perceived unfairness is not a cause of action.

6. In para 16 of the statement of claim, the plaintiff pleads one specific claim, namely, that the Will made inadequate provision for the first plaintiff. The legal basis for the other claims for relief are not identifiable and can be only guessed at. However, it is clear that whatever the specific nature of those claims might be, they all result in the same assertion that the plaintiffs are entitled to a share in the estate by way of further provision from the property which forms part of the deceased’s estate. The first plaintiff is already entitled to a share in the estate but is saying that she is entitled to a bigger share. There is only one paragraph in the statement of claim which refers to the second plaintiff, and his cause of action is not identified.

7. The second plaintiff is not either a spouse or child of the deceased. He therefore has no entitlement to make a claim for provision from the estate under s124. Any other legal basis for his claim against the estate, is not identifiable. The only reference is to a Trust Declaration which was executed in December 1997. If there is a claim arising out of this, then it is a claim against the estate. Under s 19 of the Statute of Frauds and Limitations Act, any such claim must be brought within 12 years of the date when his right to claim accrued. The Trust document referred to in para 17 of the statement of claim was executed in December 1997, before the deceased died. Any action to challenge it and obtain a share in the estate, should have been brought, at the latest, within 12 years of the grant of probate in 2001. These proceedings were not brought until 2020, and if they showed any cause of action by the second plaintiff, it would be clearly time-barred.

8. By making claims to part of the estate, the plaintiffs are in reality challenging the provisions in the deceased’s Will and claiming to be entitled to a larger share of the estate assets. There is a specific remedy provided for such claims by children, in s124 of the Wills Probate and Administration Act (WPA).

9. Section 126 (1) WPA says that such an application for further provision from the estate “shall not be heard by the National Court ... unless the application is brought within nine months after the grant of probate ...”. s 126 (2) says that this time may be extended by the court.

10. Under s126 WPA, any such claim under s124 must be made within nine months of the grant of probate, or within such further time as the court may allow. Once the time limit has expired, there is no legal entitlement to claim, ie. no cause of action, unless the claimant first obtains an extension of time from the National Court.

11. Probate was granted in 2001. The plaintiffs filed these proceedings in 2020, after the expiry of that time limit, without first having obtained an extension of time from the court. As there is no cause of action without an extension of time, the plaintiffs needed to comply with that condition precedent before being able to bring an action under s124.

12. Even assuming that all the facts pleaded in the statement of claim were proven, the only cause of action which would arise from them, is an action for further provision from the estate, which can only be brought by way of an application under s124 WPA. Section 126 (1) says that the court cannot hear it unless it is brought within time, or within extended time. It was not been brought within time or within extended time, so this court cannot hear it.

13. There is nothing to prevent the plaintiffs from making an application for an extension of time in which to make a claim against the estate, at any time up to the final distribution of the estate. On this point, I note s19 of the Statute of Frauds and Limitations, which provides that action in respect of any claim to the estate of a deceased person, cannot be brought after the expiry of 12 years from the date on which the right to receive a share of the estate, accrued. Any right to receive a share of the estate accrued either on the date of death in 1998, or when probate was granted in 2001. This is a matter which would be taken into account, on any application under s126 (1) for an extension of time.

14. Until an extension of time to bring a claim is actually granted, there is no legal entitlement to make a claim against the estate. As in the case of Graham Rundle v MVIT (No.1) (1988) PGSC 28, the obtaining of an extension of time is a condition precedent to being able to bring a proceeding to enforce a claim, after the time limit has expired (in that case, six months, in this case, nine months). Here, as the nine-month time limit expired in 2002, and as the plaintiffs have not obtained an extension of time, they have not complied with the condition precedent which would allow this court to hear their application for provision from the estate.

15. Even if every fact pleaded in the statement of claim was proven, the plaintiffs still could not succeed in their claim. The statement of claim shows that the plaintiffs are making an application for provision from the estate, which had to be made within nine months of probate in 2001, it was not made until 2020, and no extension has been obtained. The statement of claim therefore fails to disclose a valid cause of action, and the failure to bring the action within time or extended time, cannot be cured by amendment or particulars.

16. An application to dismiss proceedings essentially on the basis that they are time-barred, should only be determined at an interlocutory stage, in the clearest of cases. The Supreme Court in Oil Search Ltd v MRDC Ltd and ors (2010) SC1022, set out the principles to be applied.

17. First, what is the cause of action in the Writ of Summons? The only legal elements of a cause of action shown in the writ of summons, are for an application for further provision to be made for the first plaintiff from the estate, which is a cause of action created by s124 WPA. A cause of action by the first or second plaintiffs in relation to the Declaration of Trust was not identifiable in the writ of summons, but if identified, it would be a claim to the personal estate of the deceased person.

18. What is the date on which the cause of action accrued? Pursuant to s126 WPA, the cause of action accrued on the grant of probate, which was on 19 December 2001. If there was any other cause of action against the personal estate of the deceased, then pursuant to s19 of the Frauds and Limitations Act, it accrued on the date when the right to receive that part of the estate, accrued. It accrued either on the date of death in 1998, or at the latest, on the grant of probate in 2001.

19. Finally, is the action founded on a special contract or specialty? No.

20. These matters having been clearly established, it is appropriate for the court to deal with the time-bar issue, at this interlocutory stage.

21. The plaintiffs submitted that in fact, their nine-month time limit prescribed by s126 WPA, did not commence running until after they had received a s 60 Notice from the defendant. This was a complete misunderstanding of s 60. This section provides that when the executor is unable to finalize the estate because of pending potential claims which have been made and refused but the claimants have not taken any action to enforce their claims, the executor may issue a Notice to the claimants, requiring them to issue legal proceedings to establish or enforce their claim within three months. Such a Notice was served on the plaintiffs in December 2019 and they issued these proceedings. The plaintiffs submitted that their cause of action for further provision to be made from the estate did not arise until they were served with the s60 Notice, so that the nine months did not start to run until that date.

22. This is plainly incorrect. Section 126 (1) clearly prescribes that the time limit runs from the date when probate was granted, which was in 2001. The s 60 Notice only compelled the plaintiffs to establish whatever claim they may have had, by issuing legal proceedings. As it has transpired, these legal proceedings have not established their claim, as the plaintiffs are unable to make an application for provision from the estate under s124 WPA, until they have obtained an extension of time.

23. Even if the plaintiffs were under some misconception as to the date when their cause of action accrued, the Supreme Court in Mamun Investments Ltd and anor v Onda Koim and ors (2015) SC1409 confirmed that the cause of action accrues as prescribed, irrespective of the plaintiff’s knowledge of the fact.

24. Section 60 WPA did not create any cause of action in the plaintiffs. It merely required them to take action to establish the validity of whatever cause of action they were asserting that they had, against the estate. It is not the case that the plaintiffs had no cause of action for provision from the estate, or no other right to claim against the estate, before the s 60 Notice was issued. The plaintiffs and all other beneficiaries had that cause of action from the moment when probate was granted in 2001. This right to claim provision from the estate was exercised by the plaintiff’s siblings between 2003-2011.

25. I therefore find that the statement of claim fails to disclose a valid cause of action, because the only cause of action identifiable from the statement of claim, is an action under s124 WPA, which is long since time-barred, as no extension of time has been obtained. The statement of claim fails to identify any other cause of action, but if it did, any other such claim would be time-barred by s 19 of the Frauds and Limitations Act.

26. If the plaintiffs were now to apply for and obtain an extension of time, they would then be entitled to issue proceedings for an application under s 124 WPA. However, the extension could not be retrospective, and could not be back-dated to save this proceeding which this court cannot hear (under s 126), and which does not disclose a valid cause of action.

27. Accordingly, even if every fact in the writ of summons before this court was proven, the plaintiffs cannot succeed, as the statement of claim shows that they do not have an extension of time, and the claims are time-barred. This is not a defect which can be cured by amendment or particulars.

28. As this is a plain and obvious case of a fundamental defect which cannot be cured, it is appropriate for the court to exercise its discretion to stop the proceedings.

29. I therefore make the following orders:

(1) The proceedings herein are dismissed.

(2) The plaintiffs are to pay the defendants’ costs on a party/party basis, to be agreed or taxed.
_____________________________________________________________
Wang Dee Lawyers: Lawyers for the Plaintiffs
Ashurst PNG Lawyers: Lawyers for the Defendant