Papua New Guinea Law Reports

The applicant now seeks leave of this Court pursuant to s. 64 of the Papua and New Guinea Act to appeal against the decision of the Full Court. We have heard a full argument from the parties and are in a position to dispose of the matter as on appeal. The case is clearly one for the grant of leave.

Provisions enabling the grant of special mining leases on private land, the grant of leases for mining purposes on private land and authorities for prospecting on private land and the other provisions of Pt VI, were all introduced into the Ordinance by the same amendment of the Ordinance. Special mining leases granted pursuant to s. 49B are to contain such terms, conditions and covenants as the Administrator-in-Council determines. Apart from conferring on the lessee the right to mine such a lease confers on the lessee such other rights ancillary to mining as are specified in the lease. By s. 49 O the Administrator is empowered to grant a lease for mining purposes if specified as ancillary to mining operations carried out under “the dominant lease”, in this case the special mining lease granted on 28th July, 1969. The purposes for which a lease for mining purposes may be granted include the making of roads. The term of such a lease is to be identical with the term or the then balance of the term of the dominant lease. S. 49R(1) provides:

“A lease for mining purposes shall contain such covenants and conditions relating to the installation of works and the use of the land as the Administrator determines.”

The expression used in s. 56 of the Ordinance is “compensation in respect of prospecting and mining”. That is a large expression and quite apt, in my opinion, to include compensation for damage done in activities which are ancillary to mining and carried out to further the mining venture. But the Full Court thought that “mining” in the context of Pt VI of the Ordinance did not include such an ancillary activity as the building of an access road. It is quite clear from a perusal of the Ordinance that if damage done in pursuance of a lease for mining purposes may not be compensated under s. 56 there is no provision of the Ordinance which gives the person suffering the damage any right to compensation. This, the Full Court of the Supreme Court realised but expressed the view that this was the design of the Ordinance which intended that the lease for mining purposes should contain appropriate provision for the payment—and presumably the determination—of compensation for damage done by the exercise of the rights granted by the lease. However, as appears from my recital of the relevant provisions of the Ordinance, the power of the Administrator, who has the authority to grant such a lease, is limited to inserting in the lease “such covenants and conditions relating to the installation of works and the use of the land”. This power, in my opinion, is quite inadequate to support covenants and conditions conferring rights to compensation and specifying how such compensation shall be determined. But, even if the relevant power of the Administrator were large enough to authorise such covenants or conditions, their insertion in the lease would be a matter for the exercise of the Administrator’s discretion. Thus, the grant of a right to compensation on the view adopted by the Full Court would lie in the discretion of the Administrator.

An examination of the Ordinance satisfies me that in every other instance in which damage may be done by the exercise of a right under a mining tenement compensation is to be paid. I cannot discover any policy in the Ordinance which would require for its attainment either a denial of compensation for damage done in exercise of a right under a lease for mining purposes or for the dependence of a right to such compensation upon the discretion of the Administrator. Indeed, I should think that damage to the property of another by the lessee is at least as likely where mining purposes within s. 49 O(3) are being pursued under a lease for mining purposes as where a mining operation is being carried out under a special mining lease. In that connection, it may be observed that such a lease may authorise ancillary activities. Such activities would presumably be comprehended in the word “mining” in s. 56 on its narrowest construction. There would seem to be no reason why there should be provision for compensation as of right in the one case and none in the other. I see no reason whatever for giving a narrow construction to the wide words of s. 56.

But it is said that the inclusion of s. 56 in Pt VI of the Ordinance which is headed “Prospecting and Mining on Private Land” indicates the narrowness of s. 56. I am unable to accept this contention. Section 55 provides for applications for mining tenements. “Mining tenements” by s. 6 means, unless the contrary intention appears, “any land held under a mining lease, or lease for mining purposes, or application therefor . . .”. The prosecutor argues that, though falling within the description of the definition, a lease for mining purposes ought not to be regarded as a mining tenement within s. 55. The prosecutor pointed out that such a lease cannot be included in the operation of s. 57 because of the language of that section. It is said that that section contains a sufficient indication to the contrary within the meaning of s. 6. But if that be so, it does not follow that the defined meaning of mining tenement should not operate in s. 55. I can find no contrary intention in that section. Indeed, there is every reason for giving the words their defined meaning for if that is not done there is no provision in the Ordinance for notifying an application for the grant of a lease for mining purposes. Further s. 55(6) makes it clear that the section applies to mining tenements which it is not within the power of the Warden to grant; a lease for mining purposes is such a mining tenement.

The preliminary assessment by the Warden of likely damage so as to determine an amount to be deposited against possible claims for compensation does not detract in my opinion from the considerations telling in favour of the inclusion of an application for the grant of a lease for mining purposes within the operation of the section. Thus in my opinion an application for a lease for mining purposes to be granted under s. 49 O must be made in the prescribed form to the Warden who is to ensure that the owner of the private land concerned is informed of the application. Having so concluded, any reason for limiting the operation of s. 56 because of its place in Pt VI completely disappears. Rather, that conclusion suggests that “mining” in s. 56(1) should be given a generous denotation so as to include compensation for damage done in the accomplishment of mining purposes under s. 49 O.

In my opinion, the Full Court was in error in holding that the Warden’s Court did not have jurisdiction to entertain and to grant the applicant’s claim for compensation for the destruction of his “economic trees” by the prosecutor in the exercise of its rights under, or in anticipation of the issue of, a lease for mining purposes. In my opinion, the Warden’s Court had the necessary jurisdiction.

However, the prosecutor presses the ground on which it sought the orders for prohibition and certiorari. Having regard to the opinion I have expressed, neither writ could be granted for complete lack of jurisdiction. But the prosecutor says that the a Warden’s Court exceeded its jurisdiction or failed to exercise it in awarding the total sum of compensation which it ordered the prosecutor to pay the applicant. A subsidiary submission was made that the Warden’s Court could not make an order for payment of the assessed compensation by instalments: but this was done in this case with the consent of the prosecutor. In any case I do not understand the prosecutor to seek a writ of prohibition quoad, limited to the order for payment by instalments. Consequently, the power of the Warden’s Court to order payment of compensation by instalments need not be further examined in this case.

The prosecutor’s substantial submission on this aspect of the case is that the amount fixed by the Warden is so far beyond all reason as to amount to an excess of, or a failure to exercise, jurisdiction. As I have said, the basis of the assessment is not now challenged. It is the total amount of the compensation and the lack of any discounting to cover the business hazards, including fluctuating world prices for the commodity, which a person in the applicant’s situation may or perhaps must encounter during such a long span of years of that covered by the award of compensation which are the source of the prosecutor’s complaint. No doubt the award was very generous: and no doubt there may have been some unreality in the lack of recognition of those hazards and of the period of time necessarily elapsing before cocoa trees are fully productive. The prosecutor sought to draw some distinction relevant to the circumstances between compensation and damages as explaining the amount of the assessed compensation. But I am unable to see any application for that distinction in relation to the Warden’s award. The applicant’s economic trees were destroyed. His land was not acquired. He is to receive compensation for his loss of the trees, or, it might be said, for the damage to his plantation by the destruction of the trees. The basis of that compensation is the value of those trees to him.

I am of opinion that in making his award of compensation the Warden did not exceed his jurisdiction. He has exercised it. Whether he did so rightly or wrongly need not be decided, for the proceeding before the Supreme Court was not an appeal. His award in respect of his calculation of compensation has no binding value as a precedent for the calculation of compensation in other cases. Each of them will turn on their own circumstances.

Accordingly, I am of opinion that the appeal should be allowed, the order of the Full Court set aside and the orders nisi for prohibition and certiorari discharged.

MCTIERNAN J: I athat that the appeal be allowed and I concur in the reasons of the Chief Justice

MENZIES J:&/b>: I have had the advantage of reading the judgment of the Chief Justice wherein everything that ierial is set out. With what what His Honour has said about the appellant’s entitlement to compensation under s. 56 of the Ordinance, I agree.

The jurisdiction to assess compensation given by that section is a jurisdiction not merely to make a correct award of compensation; it is, of course, a jurisdiction which permits the making of a wrong award. The section itself provides a remedy to a person not satisfied with an assessment of compensation by the Warden, and, in the circumstances of this case, it seems to me that the application for certiorari or prohibition was misconceived. These writs do not go to correct awards wrong in law or made contrary to the evidence; they go to restrain excess of jurisdiction or to control errors of law upon the face of an award. It is, therefore, not to the point in considering this application to conclude, from the reasons which the Warden gave, that the method of assessment he adopted to determine compensation to be awarded must have resulted in too high a figure. This is, I think, apparent. The cocoa trees in question were not in full bearing; the economic life of a cocoa tree is about 30 years; nevertheless compensation was assessed on the basis that the trees destroyed would, over 42 years from the date of their destruction, produce in each year a full net return—calculated with an allowance of 5 per cent to cover the unproductive period of trees replanted to replace old trees—for a mature tree.

I agree with the order proposed by the Chief Justice.

WINDEYER J: In my opinion the application for special leave to appeal from the judgment of upreme Court of the Territory of Papua and and New Guinea should be granted. The case was fully argued. I consider that the Supreme Court ought not to have made absolute the order nisi for prohibition. As the Court did not expressly determine the application for certiorari, I say no more of it than that I think the order nisi should have been formally discharged. I can see no basis for certiorari in this case, even if it be not precluded by s. 134 of the Mining Ordinance 1928-1966. Courts ought not to forget the warning and adjuration of Morris L.J. in R. v. Northumberland Compensation Appeal Tribunal; Ex parte Shaw[cccxc]2 against treating certiorari as a disguised form of appeal.

I shot elaborate at length my reasons for thinkthinking that the appeal to this Court was properly entertained and should be allowed. I agree in what the Chief Justice has said in his judgment. I shall merely make some observations on some aspects that seem to me of critical importance.

The award that the Mining Warden made was expressed in his formal order as the award of the Warden’s Court at Nairovi and Kieta. It was as follows:

“And the Court orders:

1. ; The defendefendant shall pay to the plaintiftin Bng th of $.00 fe lthe loss ooss of 110f 110 coco cocoa trea trees and the manner of payment shall be as follows.

(a) On 10th A ril, 1970, $61.60 and

(b) ;ټ&0 n 10 eachh tnth thereahereafter fter untiluntil 10 A 10 April, 2011, a sum of .

2. &#160 t&##16; The defendant shall forthwith pay to the plaintiff Martin Benggong a sum offor tve seceran e of the land from other lher land owned by the plaintiff.

3. ـ &#The; efendefendant shall forthwith pay to the plaintiff Martin Benggong a sum of $50 for loss oface r ghts of waof way.

4. Thendefe sant shall forthwith pay to the plaintiff Martin Bengg sum 84 asequential damage beingbeing $50 $50 for nfor nuisance caused by dust and noise and $334 to cover the cost of fencing on either side of the road which severs the plaintiff’s land for a distance of 16.7 chains.

Given under my hand at Kieta this 1st day of April, 1970.”

The Warden expressly declared that his order was made by virtue of s. 56 of the Ordinance. The part that the present respondent company specifically challenges is the award for the loss of the cocoa trees.

It is noteworthy that the company did not originally dispute in the Supreme Court that the Warden had jurisdiction under s. 56 to make an award for the damage of which the appellant complained. Its claim was that the amount was excessive and based upon a false premise. Nor had it before the Warden objected to the proposal, made on behalf of the appellant, that the compensation should be assessed at a capital sum and paid by monthly instalments over the period of the lease.

Although the company went to the Supreme Court hoping that, by motions for prohibition and certiorari, it could there dispute the amount of the Warden’s award, this aspect was not dealt with by that Court. That was because their Honours questioned whether s. 56 was applicable to damage suffered by an owner of private land which had become the subject of a lease for mining purposes. A lease for mining purposes under the Ordinance is of the same nature as tenements of the same name in Australia. When granted over private land such interests are peculiar creatures of Australian mining law. I had occasion to notice their anomalous characteristics in Wade v. New South Wales Rutile Mining Company Pty. Ltd.[cccxci]3. The question whether in this case the Warden had any jurisdiction under s. 56 having been raised by the Supreme Court, their Honours adjourned the case to enable counsel to consider that matter. Counsel for the company readily embraced the suggestion thus held out. On the resumption he put a challenge to the Warden’s jurisdiction in the forefront of his argument. The Supreme Court upheld his submission and made an order for prohibition on the ground that the Warden had exceeded his jurisdiction.

Their Honours reached their conclusion mainly upon a comparison between s. 56 and other provisions of Pt VI of the Ordinance and by reference to the definition of “Mining Purposes” in s. 6. That definition does not expressly mention the making of roads as one of the designated purposes. It is, however, noteworthy that the definition has two limbs. First it states that the term “mining purposes” “means the purpose of searching for or obtaining gold or any other mineral from earth by any mode or method of mining . . .” Then it goes on to say that it “includes” a variety of operations described, among them “constructing any railway or tramway”. To suppose that constructing a road with rails upon it can be within the meaning of a mining purpose, but that making an ordinary road of access cannot, seems to me to be carrying literalism rather far. However, it is not necessary to adopt this narrow construction of the effect of s. 56, because s. 49 O(3) states “the making of roads” as among “the purposes for which a lease for mining purposes may be granted”. This provision was one of those introduced into the Ordinance by amendment in 1966. The definition of “mining purposes” in s. 6 operates “unless the contrary intention appears”. It should now I think be read having the new provision in mind. Thus ordinary roads now come in with railroads and tramroads.

The Ordinance is, of course, to be read as it now stands, and read as a whole. But that does not necessitate curtailing the width of s. 56 in the interest of a supposed harmony with its neighbours. Words may be known by the company they keep: but I do not think we should say of s. 56, noscitur a sociis. It provides that compensation “in respect of prospecting or mining on private land shall be assessed in relation to” the matters specified and for “all consequential damage”. The making of an access road authorised by a lease for mining purposes is I have no doubt something done “in respect of prospecting or mining”. It is surely not surprising that a landowner should have a right to compensation for damage if his land be taken by a lease for mining purposes in the same way as he would have if it were made the subject of some other mining tenement. It would be strange if, as the respondent contends, he must rely for recompense for loss and damage on the Administrator in his discretion making this a condition of the lease. Consistency in policy and considerations of justice reinforce the literal reading of s. 56.

As I am unable to take the view of the Ordinance that the Supreme Court took, I turn to the aspect of the matter which their Honours did not find it necessary to consider, but which was argued before us. The respondent contends that the Warden’s order was extravagant in amount, so extravagant that it could be said to have been made without jurisdiction, and that therefore prohibition should go. I do not think that that proposition can be sustained. It may be that the Warden’s assessment was on a generous scale. It may be too that, in estimating the damage flowing from the loss of cocoa trees, he took into consideration not only the destruction of trees that were on the land but also that the appellant’s being deprived of the use of the land would prevent his replanting it when the life of those trees would have expired. Compensation for the loss of trees ought to be assessed, it would seem, by reference to their expected bearing life, not by the duration of the lease of the land. An inability to plant trees on the land taken for a road might thus be considered an element in assessing a proper rent, or the occupation fee under s. 116 B, rather than “consequential damage” within the meaning of s. 56 (1). However, even if the Warden’s assessment was excessive, and I do not say that it was or was not, I do not think that it can be said that it was not made in the exercise of his jurisdiction, or that there is any error manifest on the face of it. An application for certiorari or prohibition is not a disguise for an appeal against an excessive assessment. The remedy for that is an arbitration under the Arbitration Ordinance as provided for in s. 56 (3). The respondent did not invoke this remedy but mistakenly challenged the Warden’s jurisdiction.

I concur in the order that the Chief Justice proposes.

OWEN J: I agree thth the Chief Justice.

Appeal allowed with costs. Order of the Supreme Court of erritory ofry of Papua and New Guinea set aside and in lieu thereof order that the orders nisi for prohibition and certiorari be discharged with costs.

Solicitor for the applicant: Cannan & Peterson as agents for W. A. Lalor, Public Solicitor.
Solicitor for the respondent: Thynne & Macartney as agents for Cyril P. McCubbery & Co.

[ccclxxxix]Infra p. 342.
[cccxc] [1952] 1 KB. 388 at p. 357.
[cccxci][1969] HCA 28; (1969) 121 CLR. 177.