Administration of Territory of Papua and New Guinea v Leahy (1961) 105 CLR 6; 34 ALJR 472; [1961] ALR 691; No132A; [22/1959]

• Jurisdiction: Papua New Guinea
• Court: High Court
• Judge: Kitto J:
• Judgment Date: 07 March 1961
• Citation: [1961] ALR 691; No132A; [22/1959]
• Year: 1961

High Court: Dixon CJ, McTiernan J, Kitto J

Judgment Delivered: 7 March 1961

1 Contract—Tort—Administration carrying out policy of tick eradication—Plaintiff seeking individual aid—Correspondence—Interview with departmental officers—Department of Agriculture arranging to take over tick spraying on plaintiff's property—Plaintiff to supply labour and muster cattle—Neglect of duty by officers of Department—Damage—Whether Administration under any contractual or tortious liability—Claims by and against the Administration Act 1951, s5.

2

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PRIOR–HISTORY: APPEAL from the Supreme Court of the Territory of Papua and New Guinea.

Michael James Leahy brought an action in the Supreme Court of the Territory of Papua and New Guinea against the Administration of the Territory and in his statement of claim alleged as follows: "1. The plaintiff is the lessee and the defendant is the lessor of a property situated at Zenag in the Territory of New Guinea on which for a number of years the plaintiff has been grazing and rearing dairy and beef cattle and carrying on the businesses of producer and vendor of dairy products, beef cattle and meat. 2. The plaintiff says that by an oral agreement made between himself and the defendant at Port Moresby in May 1954, the defendant, in consideration of the plaintiff allowing its servants to enter upon his leasehold property at Zenag, and to spray the cattle thereon and of the plaintiff making available to the defendant the services of six native labourers and of the plaintiff forbearing from interfering with the work of the defendant's servants in carrying out a tick–eradication campaign on the plaintiff's property at Zenag the defendant agreed that it would carry on at Zenag aforesaid a campaign to eradicate cattle tick from the plaintiff's cattle and that such campaigning would be carried out thoroughly and skilfully. 3. The defendant's servants in pursuance of the said agreement sprayed the plaintiff's cattle at Zenag aforesaid between June 1954 and July 1955 but in breach thereof failed to carry out such spraying thoroughly and skilfully." He claimed damages in the sum of 18,625 pounds.

The statement of defence of the Administration so far as here relevant was as follows: "2. The defendant never agreed as alleged in par. 2 of the said statement of claim and says that the said paragraph does not set out correctly the substance of an arrangement made between the plaintiff and the defendant. 3. The defendant admits that a conference was held at Port Moresby in or about the month of May 1954 whereby the defendant at the request of the plaintiff arranged with him the plaintiff that it would send an officer of the Department of Agriculture, Stock and Fisheries to the plaintiff's land at Zenag and there, by that officer, supervise the treatment of the plaintiff's cattle with a view to tick eradication. 4. Save as hereinbefore admitted the defendant denies each and every allegation in the amended statement of claim delivered by the plaintiff as if each allegation had been set out and traversed seriatim."

The action came on for hearing before Mann CJ who on 23 January 1959 adjudged the plaintiff entitled to recover 4,055 pounds and costs.

On 16th April 1959 the High Court granted the defendant leave to appeal to the Court from this judgment. The grounds of appeal so far as material were: "1. That on the evidence his Honour was in error in finding that a contract was entered into between the appellant and the respondent on the occasion of his visit to Port Moresby on or about 7th June 1954. 4. That the finding by his Honour that the arrangements made between the appellant and the respondent which was the subject of the said action gave rise to a contract between the appellant and the respondent was wrong in law. 5. His Honour should have held that the arrangements made between the appellant and the respondent referred to in ground 4 did not constitute a contract because the parties did not intend that the arrangements should be legally enforceable." Further relevant facts appear in the judgments of the Court hereunder.

JD Holmes QC (with him R.T.H. Barbour), for the appellant. There was no contract between the parties. The appellant could have desisted at any time from performing tick eradication on the respondent's property. The only contract was for the reimbursement of the respondent for wages paid to his native labour. (He referred to Balfour v Balfour (1919) 2 KB 571; Cohen v Cohen (1929) 42 CLR 91; Rose and Frank Co v JR Crompton & Bros Ltd (1923) 2 KB 561; (1925) AC 445; John Cooke & Co Pty Ltd and Field v The Commonwealth and the Central Wool Committee (1922) 31 CLR 394.) The words relied upon to establish the contract were used by governmental officers and not by commercial men: Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 at 460. The acts done by the Administration were the normal functions of a paternalistic government in an undeveloped area. The Administration was rendering a gratuitous service to settlers in this area.

N.H. Bowen QC(with him AHS Conlon), for the respondent. If there was a contractual intention in the parties there is abundant evidence and sufficient consideration to support the mutual promises. The Administration agreed instead of controlling the ticks to eradicate them. The arrangement between the parties was that whereas previously the respondent had been doing this work, the appellant was going to take it over. The appellant had no power to do this as a matter of policy enforcement. (He referred to the Animal Disease and Control Act 1952.) Even if this Act were in force at the relevant time, there is no evidence that it applied to this case. In Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424; (1955) 93 CLR 546 a declaration of public policy became important because it was relied upon as the type of offer of which Carlill v Carbolic Smokeball Co (1893) 1 QB 256 is an example. The fact that the government has a policy to do something but no power to do it without contracting for it points rather in favour of contract than against it. The importance to both parties of the arrangement involving proprietary rights and the expenditure of money and the onerous stipulations and requirements so far as the respondent was concerned is suggestive of a contractual arrangement. This case is not within the class where a gratuitous service is to be performed, but within that class where a service is to be performed for consideration. (He referred to Edgeware Highway Board v Harrow Gas Co (1874) LR 10 QB 92.)

DISPOSITION: Appeal allowed with costs. Order that the judgment of the Supreme Court of the Territory of Papua and New Guinea against the defendant the Administration of the Territory of Papua and New Guinea be set aside and that in lieu thereof judgment be entered for the said defendant with costs of the action to be taxed.

SUMMARY: The appellant was the lessor and the respondent the lessee of a property on which the respondent for some years had been rearing dairy and beef cattle. The respondent had unsuccessfully tried to cope with an infestation of cattle tick on the property by using tickicides and hand–spraying equipment supplied to him gratis by the Department of Agriculture of the Territory. Towards the end of 1953 the respondent entered into correspondence with the Department and the Administrator in which he referred to his financial difficulty in continuing to spray and suggested that the Department should send one of its men on to his property to take the job off his hands. The correspondence contained statements by the Department indicating clearly that it was dealing with the matter on the basis of grants of government assistance. In May 1954 the Department did supply a man but the cost of spraying still fell upon the respondent. In search of relief he went to Port Moresby where he had an interview with certain departmental officers and then with the Administrator, as a result of which it was arranged that, in accordance with its policy of tick eradication, the Department would take over the spraying on the respondent's property and would pay for the services of the respondent's labourers, which he was to supply. The respondent was also to arrange for the cattle to be mustered. The Department set about performing its side of the arrangement, but two of its officers to whom the task was entrusted failed to carry it out skilfully and efficiently. The respondent contended that the appellant, by its officers, had bound itself by contract to carry on a campaign to eradicate cattle tick from the respondent's cattle skilfully and thoroughly and that it was in breach of this contract as a result of which the respondent had suffered damage.

Held, that the arrangement made was...