72] PNGLR 340;

• Jurisdiction: Papua New Guinea
• Court: High Court
• Judge: Owen J:
• Judgment Date: 30 July 1971
• Citation: (1971) 124 CLR 47; 45 ALJR 412; [28/1971] overruling FC 11?
• Judgment Number: Benggong v Bougainville Copper Pty Ltd [1971
• Year: 1971

High Court: Barwick CJ, McTiernan J, Menzies J, Windeyer J, Owen J

Judgment Delivered: 30 July 1971

1 Mining and minerals—Special mining lease—Compensation for damage to private land—Building of access road—Whether "prospecting or mining" operation—Mining Act 1928–1966 (Papua and New Guinea), s56.

2

Application for leave to appeal from the Supreme Court of the Territory of Papua and New Guinea.

Martin Benggong sought leave to appeal to the High Court from a judgment or order of the Full Court of the Supreme Court of the Territory of Papua and New Guinea (R v The Mining Warden at Bougainville: Ex parte Bougainville Copper Pty Ltd (1971) FC13) making absolute an order nisi for prohibition, in respect of proceedings for compensation in the Mining Warden's Court at Bougainville, obtained by Bougainville Copper Pty. Ltd. The relevant facts appear in the judgment of Barwick CJ hereunder.

S36 of the Mining Act 1928 (Papua and New Guinea) provided for compensation to be awarded to the owners of private land "in respect of prospecting or mining on private land". Amongst the matters for which compensation might be awarded was "damage to the surface and to improvements on the surface, including crops and economic trees".

Held: that the section authorised an award of compensation for the destruction of economic trees on private land in the course of activities which were ancillary to mining and were carried out to further a mining venture elsewhere, such as damage caused by the building of an access road to the site of a mining operation.

Decision of the Full Court of the Supreme Court of the Territory of Papua and New Guinea (Full Court): R v The Mining Warden at Bougainville: Ex parte Bougainville Copper Pty Ltd (1971) FC13

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Barwick CJ:

The applicant, Martin Benggong, is the owner of an area of land at Bougainville in the Territory of Papua and New Guinea on which there is a plantation operated by him and known as "Mainku". Prior to the events out of which this matter has arisen, the plantation included 1,888 cocoa trees. On 28 July 1969 Bougainville Copper Pty Ltd (the prosecutor) was granted by the Administrator–in–Council a special mining lease pursuant to Div. 4 of Part IV of the Mining Act 1928–1966 of the Territory of Papua and New Guinea (The Act). The term of the special mining lease was forty–two years from 10 April 1969 but subject to the provisions of an agreement between the Administrator of the Territory and the prosecutor and of the Mining (Bougainville Copper Agreement) Act 1967 (Territory of Papua and New Guinea). On 31 July 1969 notice was gazetted that the Administrator of the Territory had granted the application of the prosecutor for a lease of certain land for mining purposes pursuant to Div. 5 of the said Part IV. The land to be leased for mining purposes included portion of the applicant's land. Up to the present time no formal lease has been issued but the prosecutor has acted on the footing that it had the rights which a lease in accordance with its application would give. The mining purpose for which the lease for mining purposes is to be issued is or includes the making of an access road to the site of the prosecutor's mining operation carried on under the special mining lease to which I have referred. In making the access road in the area of the applicant's plantation the prosecutor destroyed 110 mature cocoa trees. The applicant claimed compensation for the destruction to his trees as "economic trees" under s56 of the Act. That section provides:

"56(1) Compensation in respect of prospecting or mining on private land shall be assessed in relation to the following matters:—

(a) damage to the surface and to improvements on the surface, including crops and economic trees…

(2) The owner of private land eligible for compensation in accordance with Subsection (1) of this section may at any time lodge a claim with the Warden for assessment of compensation or additional compensation, and the Warden shall thereupon assess the compensation.

(3) In cases where either party is not satisfied with an assessment of compensation by the Warden, that party may require the matter to be referred to arbitration under the Arbitration Act 1951."

The applicant's claim was treated by the parties as a claim within s68 of the Act. It was heard in the Mining Warden's Court in accordance with s78 of the Act. (at p49)

4. At the outset of the proceedings in the Warden's Court the applicant and the prosecutor agreed that the Warden could act in the assessment of compensation by resort to the provisions of s78(2) of the Act. This allowed him to hear the claim as a complaint in a summary way upon oral evidence and on his own view. The parties further agreed that the decision of the Warden should be final and that there should be no right of appeal: see s78(3). A submission was made by the prosecutor in the course of the present application that compensation under s56 ought to be fixed by the Warden and not by the Warden's Court. In my opinion there is no substance in this submission. The procedure taken in the Warden's Court to determine compensation for the destruction of the cocoa trees as a claim falling within s68 and to be heard under s78 was regular. (at p49)

5. The Warden entered on the hearing of the complaint and heard oral evidence which was chiefly provided by the prosecutor. Apparently the Warden was personally familiar with the applicant's land and with "the management techniques" of the applicant in running his plantation. He said he had observed these techniques for the past five years. His conclusion was that the applicant's "plantation is efficiently managed and a high producer". He rejected the view pressed on him by the prosecutor that the proper way to measure the compensation due to the applicant for the destruction of the 110 "economic trees" was to give the applicant the value of the freehold land on which the 110 trees had stood. He also rejected the view that even in such a case it was proper to value land being worked by an indigene as a family enterprise according to the measure to be applied in valuing properties in the possession of expatriate owners. He concluded that the proper measure of compensation was to give to the applicant the value to him of the trees which had been destroyed. On the hearing of the present application the prosecutor, quite rightly as I think, did not contest this approach to the assessment of compensation for the destruction of "economic trees". (at p50)

6. However the Warden measured this value of those trees by what the applicant might expect to receive from the trees during the period that the prosecutor would be entitled to exercise its rights under a lease for mining purposes that is to say a period of forty–two years. He seems to have accepted the view that the inability to re–plant trees between the end of the expectant life of the destroyed trees and the expiry of the term of the lease should be measured by giving the applicant the same return in that period per tree as he felt it proper to give the applicant for the destroyed trees during their lifespan as economic trees. He assessed the value of each of the cocoa trees at $35.00 being the anticipated net return of each tree to the applicant over the period of the balance of the prosecutor's lease. Consequently he gave the applicant a total sum representing this amount for each of the 110 trees. This sum was not discounted to reflect the hazards of the business in which such annual returns might be expected, hazards other than those associated with the employment of labour and the possibility of expropriation. The prosecutor agreed that the total sum which the Warden might properly assess for compensation might be paid as the applicant wished by monthly payments spread over the term of the lease. Accordingly the order made by the Warden's Court was for the payment of a total sum of $3,850 payable by instalments. The prosecutor was dissatisfied with this order, and desired to challenge the basis of the assessment. Thereupon it sought and obtained of a Judge of the Supreme Court of Papua and New Guinea an order nisi for a writ of prohibition and an order nisi for a writ of certiorari. Grounds common to both these orders were: "1. That the said order was wrong in law. 2. That the said order was contrary to the provisions of s56 of the Mining Act. 3. That the order was in excess of the jurisdiction of the Court. 4. That the order was based on personal views which were not canvassed before the parties and were not referred to in evidence and was therefore contrary to natural justice." An additional ground was contained in the order nisi for prohibition namely: "5. That the said order was contrary to the evidence and/or was made without evidence." (at...