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Tau v Administration of the Territory of Papua and New Guinea [1969] PGSC 39; [1969-70] PNGLR 53 (2 October 1969)

Papua New Guinea Law Reports - 1969-70

[1969-70] PNGLR 53 - Teori Tau v Administration of the Territory of Papua and New Guinea

[1969-70] PNGLR 53

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

TEORI TAU

THE ADMINISTRATION OF THE TERRITORY OF PAPUA AND NEW GUINEA

Port Moresby

Frost J

2 October 1969

PRACTICE - Parties - Joinder of defendant - Discretion - Rules of the Supreme Court - O. 3, r. 11.[lxviii]¹

The plaintiffs brought an action against the defendant seeking a declaration that certain sections of the Mining Ordinance 1928-1966 of the Territory of New Guinea were invalid. Among the sections impugned were those conferring upon the defendant power to grant mining leases and special mining leases. Before the delivery of pleadings the applicant, which held a mining lease and a special mining lease from the defendant over land owned by the plaintiffs, applied pursuant to O. 3, r. 11 of the Rules of the Supreme Court to be added as a defendant. Relying on the validity of the leases the applicant had already spent $20,000,000 in exploration and construction work and was committed to even more substantial expenditure in developing mining operations within the areas covered by the leases.

Held:

N1>(1) That the Court has a wide discretion in deciding whether to grant or refuse an application to be added as a party pursuant to O. 3, r. 11.

Byrne v. Brown [1889] UKLawRpKQB 31; (1889), 22 Q.B.D. 657; Dollfus Mieg et Compagnie S.A. v. Bank of England, [1951] Ch. 33; Amon v. Raphael Tuck, [1956] 1 Q.B. 357; Fire Auto and Marine Insurance v. Greene, [1964] 2 Q.B. 687; Gurtner v. Circuit, [1968] 2 Q.B. 587, and In re Vandervell’s Trusts, [1969] 1 W.L.R. 437, referred to.

N1>(2) That, as the declaration sought would directly affect the applicant in the exercise of its legal rights and as the applicant had spent, and was committed to spend, very substantial sums on the assumption its leases were valid, its application to be joined as a defendant should be granted.

Quaere, whether the claim in the writ that various sections of the mining legislation were invalid was, without more, a valid general endorsement.

Anderson v. The Commonwealth of Australia [1932] HCA 2; (1932), 47 C.L.R. 50; Fishwick v. Cleland [1960] HCA 55; (1960), 106 C.L.R. 186, at p. 199 and Marshall v. London Passenger Transport Board, [1936] 3 All E.R. 83, at p. 90, referred to.

Motion.

Bougainville Copper Pty. Ltd. moved that it be added as a defendant in an action commenced by Teori Tau against the Administration of the Territory of Papua and New Guinea. The endorsement on the writ stated that the plaintiff brought the action in a representative capacity on behalf of himself and other villagers of Pakia Village in the Kieta district of Bougainville. The relevant facts appear sufficiently from the judgment.

Counsel:

Griffin, for the applicant.

Broadley, for the plaintiff.

McKinnon, for the defendant.

2 October 1969

FROST J: This is a motion made by the applicant, Bougainville Copper Pty. Ltd. that that company be added as a defendant in the action pursuant to O. 3, r. 11 of the Rules of the Supreme Court. The relevant portion of that rule is as follows:

“The Court or a Judge may, at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court or Judge to be just, order . . . that the names of any persons who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added, either as plaintiffs or defendants.”

The plaintiff sues the defendant, the Administration of the Territory of Papua and New Guinea (the writ apparently having been brought pursuant to the Claims by and against the Administration Ordinance 1951) for a declaration that certain sections of the Mining Ordinance 1928-1966 of the Territory of New Guinea are invalid. In particular, it is claimed that the following sections are invalid—s. 32, which confers upon the Administration power to grant mineral leases; s. 49 (b), conferring the power to grant special mining leases; s. 49 (o), conferring the power to grant mining leases with specified ancillary purposes; and s. 191 of the Ordinance, which provides that all gold and minerals in or upon any land in the Territory are the property of the Administration. It is also stated in the writ that it is brought in a representative capacity by the plaintiff on behalf of himself and other villagers of Pakia Village in the Kieta district of Bougainville in the Territory of New Guinea.

I drew counsel’s attention, when the matter first came before me, to the question whether the general endorsement was a proper one. It seems to me at the least doubtful whether the action is properly constituted or that the plaintiffs can succeed unless they can show that they are more particularly affected than any other people who live within the Territory: see Anderson v. The Commonwealth of Australia[lxix]²; Fishwick v. Cleland[lxx]³. The requirements of a valid general endorsement are referred to by Lord Justice Romer in Marshall v. London Passenger Transport Board[lxxi]⁴. However, neither the plaintiff nor the defendant wish to make any submissions concerning the endorsement and accordingly I proceed to decide the issue on the basis of the endorsement, together with the facts deposed to by Donald Clayton Vernon, the applicant’s assistant general manager. I consider that it is a fair inference to be drawn from the endorsement that the plaintiffs are the owners of the Pakia Village land. It further appears from the affidavit, which was not disputed by the plaintiffs, that it is their interest as owners of Pakia Village which is threatened, first of all, by a special mining lease and also a lease for mining of land purposes which includes Pakia Village which have been granted by the Administration to the applicant (pars. 7 and 8).

Mr. Broadley’s argument was the plaintiff was reluctant to join the applicant because he claimed he had no cause of action against the applicant and that the plaintiff did not desire to pursue any remedy against the applicant. The plaintiff was merely prosecuting a pure claim in law, that the sections of the Ordinance are invalid, because they are contrary to the provisions of The Constitution (Cth), s. 51 (xxxi.) which confers power on the Commonwealth Parliament to make laws with respect to the acquisition of property upon just terms. He submitted also that the facts are not clear at this stage before the delivery of pleadings. Some of his arguments I consider cannot be supported. Mr. Broadley submitted that the applicant had no greater interest in the proceedings than any other mining company in the Territory, and that there was no direct attack upon the leases of the applicant, an argument which reflected back on the plaintiff. But even at this stage of the proceedings, in my opinion, the Court is entitled to go to the substance of the matter and it is apparent that the plaintiff’s claim is not merely to assert that s. 191 can confer no right in the Administration to minerals upon his land, which has been leased to the applicant by the defendant, but also to have those leases declared invalid. The applicant claims a proprietary right to such minerals pursuant to the leases.

I now turn to the interpretation of O. 3, r. 11, which has been considered in a number of cases which were cited to me by counsel, from each of whom in this case I have had the greatest assistance. Mr. Griffin relied upon Amon v. Raphael Tuck & Sons Ltd.[lxxii]⁵, in which the test laid by Mr. Justice Devlin for the exercise of the discretion conferred on the Court was, would the order for which the plaintiff was asking directly affect the intervener, not in his commercial interests, but in his enjoyment of his legal rights?[lxxiii]⁶.

However, in a subsequent decision of the Court of Appeal, Gurtner v. Circuit[lxxiv]⁷, the Court of Appeal had occasion to consider this test and decided that it was too restrictive. Lord Denning said:

“The relevant rule is the new R.S.C., O. 15, r. 6 (2) (b), which says that the court may order any person to be added as a party

‘whose presence before the court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon’.

That rule is in substantially the same terms as the old R.S.C., O. 16, r. 11, and nothing turns on the difference in wording. There were many cases decided on it. But I need not analyse them today. That was done by Devlin J. in Amon v. Raphael Tuck & Sons Ltd.[lxxv]⁸. He thought that the rule should be given a narrower construction, and his views were followed by John Stephenson J. in Fire Auto and Marine Insurance Co. Ltd. v. Greene[lxxvi]⁹. I am afraid that I do not agree with them. I prefer to give a wide interpretation to the rule, as Lord Esher M.R. did in Byrne v. Brown[lxxvii]¹⁰. It seems to me that when two parties are in dispute in an action at law, and the determination of that dispute will directly affect a third person in his legal rights or in his pocket, in that he will be bound to foot the bill, then the court in its discretion may allow him to be added as a party on such terms as it thinks fit. By so doing, the court achieves the object of the rule. It enables all matters in dispute to ‘be effectually and completely determined and adjudicated upon’ between all those directly concerned in the outcome”[lxxviii]¹¹.

Diplock L.J. in his judgment said:

“Clearly the rules of natural justice require that a person who is to be bound by a judgment in an action brought against another party and directly liable to the plaintiff upon the judgment should be entitled to be heard in the proceedings in which the judgment is sought to be obtained. A matter in dispute is not, in my view, effectually and completely ‘adjudicated upon’ unless the rules of natural justice are observed and all those who will be liable to satisfy the judgment are given an opportunity to be heard”[lxxix]¹².

The Court of Appeal thus laid down a wide interpretation of the rule.

Mr. Broadley relied upon a subsequent decision of Mr. Justice Buckley in In re Vandervell’s Trusts[lxxx]¹³, in which Buckley J. had before him an application under the same Rule for leave to add a defendant. Buckley J. cited the passage in Lord Denning’s judgment which I have referred to and then proceeded to distinguish it from the case before him. The Commissioners for Inland Revenue sought to be added as a party because, if the plaintiff succeeded in his claim, the liability of the estate for tax in respect of certain dividends would disappear and therefore it was said to be a matter in which the Inland Revenue Commissioners would be affected in their pocket and it was, accordingly, desirable that they should be heard and be bound by the decision. Buckley J. said in his judgment:

“But the position seems to me very different in the present case from the position in Gurtner v. Circuit[lxxxi]¹⁴ because there the whole point of the case was that there was no one to fight the plaintiff’s claim unless the bureau was allowed to do so, and the bureau was the body that was going to have to meet the claim eventually. In the present case, however, there are the plaintiffs themselves who are concerned to dispute the case put forward by the trustees and the interests of the plaintiffs and the Inland Revenue go hand in hand. . . . But apart from that aspect of the matter, the plaintiffs and the Inland Revenue have an identical interest; and in those circumstances I do not think that it can be said that the presence of the Inland Revenue before the court is necessary to ensure that ‘all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon’, and unless that can be said the case is not one which falls within the ambit of the rule at all”[lxxxii]¹⁵.

The application failed. Thus Buckley J. cut down the wide interpretation given by the Court of Appeal in Gurtner v. Circuit[lxxxiii]¹⁶, in a case where the applicant and the defendant had an identical interest.

I have found also assistance by going back to the earlier decision which Mr. Griffin cited, the case of Dollfus Mieg et Compagnie S.A. v. Bank of England[lxxxiv]¹⁷, which was also a case of an application under the same Rule. In his judgment, Mr. Justice Wynn-Parry said:

“It is to be observed that the words of the rule on which I am asked to rely, ‘or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter’, are alternative to the earlier words ‘that the names of any parties, whether plaintiffs or defendants, who ought to have been joined’; that therefore they must be intended to extend the jurisdiction of the court; and that it is not necessary, in order to invoke that jurisdiction under the latter words of the rule, to show that the intervener ought to have been joined. I think that those words confer on the court a wide jurisdiction; and, having regard to the review of the cases which I have made, it is a jurisdiction which I ought not to treat as cut down more than I must do by the guidance which I find from those cases. I find nothing in those authorities to prevent my taking the view that there is a general discretion in the court, if it thinks right, having regard to all the circumstances, to bring in an intervener in order that the questions involved in the action may be completely adjudicated upon and settled”[lxxxv]¹⁸.

Mr. Broadley’s argument, which he strongly relied on, is that if, as I hold, the issues between the parties to the writ are the validity of the mining leases granted by the Administration to the applicant and whether the property to the minerals upon the plaintiff’s land belongs to the plaintiff or the applicant under the mining leases, then the interest of the applicant in upholding the validity of the leases is identical to that of the Administration, and following In re Vandervell’s Trusts[lxxxvi]¹⁹, such interest would not be sufficient to justify it being joined as a defendant. But the latter case is also distinguishable, in my opinion, because there the Inland Revenue was only incidentally affected, whereas in the present case the applicant’s proprietary rights are directly affected.

The authorities I have cited which bind me establish that this Court has a wide discretion and the Rule is to be given a wide interpretation. In my opinion, I am entitled to take into account in exercising my discretion, not only the fact that the order sought by the plaintiff would directly affect the applicant in the enjoyment of its legal rights, but also the magnitude of the sums involved. Mr. Vernon has deposed that in reliance on the validity of the agreement between the defendant and the applicant in relation to the mining operations to be conducted by the applicant in Bougainville, the company has spent more than $20,000,000 in exploration and construction works, and has further entered into a contract agreeing to borrow sums in excess of $200,000,000 for the purposes of financing operations to be conducted at Bougainville. In addition, other contracts have been entered into for the construction of works on Bougainville. For these reasons, I have decided that this is a case in which I should exercise my discretion under the Rule, and grant the application. I accordingly order that the applicant, Bougainville Copper, be added as a defendant in the action.

Order accordingly.

Solicitor for the applicant: Cyril P. McCubbery & Co.

Solicitor for the plaintiff: W. A. Lalor, Public Solicitor.

Solicitor for the defendant: P. J. Clay, Acting Crown Solicitor.

[Note: On 12th November, 1969, Teori Tau (suing personally and on behalf of all the members of the Kinship group at Pakia Village in the Kieta Sub-District of the Bougainville District of the Territory of Papua and New Guinea descended from the earliest known ancestor Kinto) commenced an action in the High Court of Australia against the Commonwealth of Australia, the Administration of the Territory of Papua and New Guinea, and Bougainville Copper Proprietary Limited. On 26th November, 1969, a special case was stated (Barwick C.J.) in the action raising the following question of law for the determination of the Full Court: “Is an ordinance of the Territory of Papua and New Guinea (a) made pursuant to the New Guinea Act 1920; (b) made pursuant to the New Guinea Act 1920-1926; or (c) made pursuant to the Papua and New Guinea Act 1949-1964 providing for a compulsory acquisition of property invalid if it fails to provide just terms for such acquisition?” On 9th December, 1969 this question was answered in the negative: Teori Tau v. The Commonwealth [1969] HCA 62; (1969), 119 C.L.R. 564 (Barwick C.L., McTiernan, Kitto, Menzies, Windeyer, Owen and Walsh JJ.).

[lxviii]Infra, at p. 54.

[lxix](1932) 47 C.L.R. 50.

[lxx][1960] HCA 55; (1960) 106 C.L.R. 186, at p. 199.

[lxxi] [1936] 3 All E.R. 83, at p. 90.

[lxxii][1956] 1 Q.B. 357.

[lxxiii] [1956] 1 Q.B. 357, and at p. 371.

[lxxiv][1968] 2 Q.B. 587.

[lxxv][1956] 1 Q.B. 357.

[lxxvi][1964] 2 Q.B. 687.

[lxxvii](1889) 22 Q.B.D. 657.

[lxxviii][1968] 2 Q.B., at p. 595.

[lxxix][1968] 2 Q.B., at pp. 602, 603.