Peter Apoi v Kanawi Pouru

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi, J.
• Judgment Date: 12 June 2015
• Citation: (2015) N5983
• Court: National Court
• Year: 2015
• Judgement Number: N5983

Full : WS. NO. 176 of 2013; Peter Apoi, Thomas Kumusi & Joseph Kelange—for themselves and on behalf of the Customary Owners of Blocks 3, 4 and 5 of the Vanimo Timber Project Area whose names appear in the Schedule attached to this writ v Kanawi Pouru—Managing Director National Forest Authority and Patrick Pruaitch—Minister for Forest and National Forest Board and The Independent State of Papua New Guinea (2015) N5983

National Court: Kandakasi, J.

Judgment Delivered: 12 June 2015

N5983

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 176 of 2013

BETWEEN

PETER APOI, THOMAS KUMUSI & JOSEPH KELANGE – FOR THEMSELVES AND ON BEHALF OF THE CUSTOMARY OWNERS OF BLOCKS 3, 4 AND 5 OF THE VANIMO TIMBER PROJECT AREA whose names appear in the SCHEDULE ATTACHED TO THIS WRIT.

Plaintiffs

AND

KANAWI POURU – MANAGING DIRECTOR NATIONAL FOREST AUTHORITY

First Defendant

AND:

PATRICK PRUAITCH – MINISTER FOR FOREST

Second Defendant

AND:

NATIONAL FOREST BOARD

Third Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Fourth Defendant

Waigani: Kandakasi, J.

2014: 22nd October

2015: 12th June

LEGISLATION - Territory of Papua and New Guinea Forestry Ordinance 1936-1951, Forestry Act Chapter 216 and the Forestry Act 1991 – Forestry a control industry – Ownership in traditional landowners – Object and purpose of legislation – Avoid depletion of forest reserves and harvesting only in accordance with the Act - State acquires right to access, harvest only through Timber Rights Purchase Agreements (TRPAs) or Forest Marketing Agreements (FMA) – TRPAs or FMAs condition present to Timber Permits, Licenses of Authorities – No provision for extension of TRPAs - Timber Permits to confirm with term of TRPAs or FMA –Timber Permits and licenses in Timber Permits or licenses outside TRPAs or FMAs, and extension of term of TRPA not in accordance with object and purpose of legislation and therefore illegal, null and void and of no effect – Landowners entitled to damages - Sections 73 (3) (d), 136 and 137 of the Forest Act 1991, s. 4 of Forestry Regulations 1998, s. 8(1), (4) and s.10 (1)(c ) of the Forest Act Chapter 216 and Public Finances (Management) Act 1995 ss.59 and 61.

MEDIATION – Court considered mediation appropriate process to resolve the dispute – Determinative legal issue presented which require only a judicial consideration and determination presented – Mediation stayed to enable determination of determinative legal issues – Determinative issue determined in favor of plaintiff have a claim in damages – Court ordered mediation to proceed – Rules 4 and 5 ADR Rules.

Cases Cited:

Papua New Guinea Cases

Vanimo Forest Products Ltd v. PNG Forest Authority & Ors (OS No. 549/07 (JR) delivered on 15th October 2007.

PNG Power Ltd v. Ian Augerea (2013) SC1245.

Fly River Provincial Government v. Pioneer Health Services Ltd (2003) SC705.

Steamships Trading Co Ltd v. Garamut Enterprises Ltd (2000) N1959.

Manus Provincial Government vs. Kasou [1990] PNGLR 395.

Overseas Cases Cited:

BP Refinery (Westernport) Pty Limited v. Shire of Hastings [1978] 52 ALJR 20

Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997.

Darvell v. Auckland Legal Services [1993] NZLR 111.

R. v. Sec for State ex p. Fire Brigades Union [1995] 2ALLER 244

Earl of Aylesford v. Morris [1872-73] 8 AR Ch. 484.

Associated Provincial Pictures Houses Limited v. Wednesbury Co. [1948] 1KB 223.

Beaman v. A. R. T. S. Limited [1948] 1ALLER 465.

Legislation and other material cited:

Forestry Private Dealings Act

Territory of Papua and New Guinea Forestry Ordinance 1936-195

Forestry Act Chapter 216

Forestry Act 1991

Lewison, Interpretation of Contracts, at paragraph 5.03.

Counsel:

A. Baniyamai, for the Plaintiffs.

I. Shephard, for the Defendants.

12th June, 2015

1. KANDAKASI J: Introduction: This case concerns a controlled industry, namely forestry and in particular the harvesting and marketing of logs. The basic statutory documents that permit or allow for logging are Timber Rights Purchase Agreements (TPRAs) and Timber Permits (TPs). The former is an agreement between the State and the customary landowners on whose land the forest resources are, while TP is a license issued by the State to a private entity to commercially harvest and sell forest products, namely timber in exchange for levies and royalties paid to the landowners. An issue has arisen here to the effect that, the State through the Minister for Forest issued a TP to the Vanimo Forest Products Limited (VFPL) over and above the currency of a TRPA the State had secured from the landowners now represented by the plaintiffs.

2. By consent of the parties, I had earlier ordered the matter to go to mediation for the parties to find a resolution through their own negotiations facilitated by an accredited mediator. I came to that decision after considering the provisions of rr. 4 and 5 of the ADR Rules. However, before the mediation could take place, the parties identified two related issues they wanted the Court to consider and determine as they are purely legal and are determinative of the proceeding and strictly speaking they require only a judicial consideration and determination. I considered the issues and was of the view that the parties were correct. Then with their consent I proceeded to a hearing of the issues both orally and written submissions of the parties through their respective learned counsel. The relevant facts are not in issue.

Issues for determination

3. The questions or issues for the Court to determine are:

(1) Can a TRPA entered into under the repealed Forestry Private Dealings Act, Territory of Papua And New Guinea Forestry Ordinance 1936-1951, which subsequently expired be extended under the new Act, Forestry Act 1991, (as Amended)? and

(2) If the answer to the first question is in the negative, is any extension granted under new Act after the expiration of the first agreement illegal, null and void and of no effect?

Relevant facts and background

4. The facts giving rise to these issues and this proceeding is simple. Logging of PNG’s rain forests have been the subject of corruption and was the subject of the Barnett Inquiry which concluded with a report consisting of two volumes in early July 1989. That inquiry resulted in a repealing of the then governing legislation, Forestry Private Dealings Act, Territory of Papua New Guinea Forestry Ordinance 1936-1951 and being replaced by the current legislation Forestry Act 1991 (as Amended).

5. In this case, two separate TRPAs covering the Vanimo Timber Project Area were issued under the old Act. One covered only Block 6, whilst a TRPA issued on 26 March, 1968, applied to Blocks 1, 2, 3, 4 and 5. Section 137 of the new Act saved the TRPAs that were issued under the old Act. The TRPA covering Block 6 lapsed on 9th February 2007, whilst the one covering Blocks 1 to 5 lapsed on 26th March 2008. Despite the two separate TRPAs, only one Timber Permit 10-8 was issued by the defendants for the whole of the Vanimo timber project area on 31st October 1991. There is neither any explanation nor is there evidence as to why the Timber Permit could not be issued earlier. The first to the third defendants’ learned counsel submits that “perhaps, it can be assumed that logging activities had been undertaken in this area prior to that date by either the same or different contractors, ie between 1968 and 1991”.

6. The TP had a term of twenty (20) years which lapsed on 31st October, 2011, an additional three (3) more years after the expiration of the TRPA on 26th March 2008, for Blocks 1 to 5. Logging continued on Blocks 3, 4 and 5, following an extension of the TRPA for Blocks 1 to 5, on 21st April 2008, until expiration of the Timber Permit 10-8, on 26th March, 2011. The Minister for Forest (second defendant) took the view and advised that any Timber Permit issued pursuant to the TRPA would lapse upon the expiry of the TRPA. Following that advice, logging in Blocks 1, 2 and 6 ceased.

Claims and Arguments

7. Peter Apoi and his people claim that, a TP is dependent on a TRPA. Based on that, they argue that, no TP can have life beyond that of a TRPA both being creators of statute, namely the Forestry Ordinance of 1936, and later the Forestry Act Chapter 216, (the old Act). They argue that there being no provision for the extension of TRPAs, extension or grant of the TP beyond the original life of the TRPAs are illegal, null and void and of no effect.

8. At paragraph 1 (f), of their submission, the first to the third defendants concede that there is no provisions in any of the old legislation allowing for renewal or extension of TRPAs. They go on to submit however that, there is sufficient legal foundation in the law of contract generally to reasonably infer that it was an implied term of the relevant TRPA here that it would be renewed by agreement of the parties. Accordingly, the State and the customary landowners legally renewed the TRPA, which necessarily forms the foundation for the relevant Timber...