Ramu Nico Management (MCC) Ltd v Tarsie [2010] PGSC 22; SC1075 (16 July 2010)

SC1075

PAPUA NEW GUINEA
IN THE SUPREME COURT OF JUSTICE

SCA 40 OF 2010

BETWEEN:

RAMU NICO MANAGEMENT (MCC) LIMITED
First Appellant

AND:

MINERAL RESOURCES AUTHORITY
Second Appellant

AND:

DR WARI IAMO
in his capacity as the Director of the Environment
Third Appellant

AND:

DEPARTMENT OF ENVIRONMENT AND CONSERVATION
Fourth Appellant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Appellant

AND:

EDDIE TARSIE
for himself and in his capacity as Ward Councillor of Ward 3, Sidor LLG
First Respondent

AND:

FARINA SIGA
for himself and in his capacity as Ward Secretary of Ward 3, Sidor, LLG
Second Respondent

AND:

PETER SEL
Third Respondent

AND:

POMMERN INCORPORATED LAND GROUP NO 12591
Fourth Respondent

AND:

SAMA MELAMBO
for himself and as Chairman of Pommern Incorporated Land Group
Fifth Respondent

Waigani: Davani, Hartshorn and Sawong JJ.
2010: 2nd, 16th July

APPEAL against exercise of discretion, principles to disturb - Standing to sue

ENVIRONMENT ACT 2000 ss 136(1) & 136(3) – whether environmental approval lawful –interpretation - - Regulation - gazettal notice, whether adequate notice to villagers –

PUBLIC OR PRIVATE NUISANCE– whether action for law of Papua New Guinea – defence of statutory authority to action for nuisance –

UNDERTAKING AS TO DAMAGES (value thereof)

NATIONAL GOALS AND DIRECTIVE PRINCIPLES, whether give rise to serious issue to be tried -

INJUNCTIVE ORDERS – arguable case – balance of convenience - delay

Facts

The appellants are the owner of a nickel mine in Madang Province now under construction and due for completion this year 2010. The other appellants are the State and the State regulatory bodies concerned with the construction and operation of the mine. The Respondents claim to be landowners affected by the proposed activities of the first appellant. Pursuant to legislation now repealed the first appellant obtained approval of the Ramu Nickel Environmental Plan 1999. The repealed legislation was replaced by the Environmental Act 2000 which contained a saving provision for approvals granted prior to that Act coming into force. The Ramu Nickel Environmental Plan 1999 provides for approximately 100,000,000 tonnes of tailings waste plus other waste material to be deposited into Basamuk and Astrolabe Bays over the life of the mine. In the National Court the Respondents obtained an interim injunction preventing construction of any undersea part of the tailings disposal system, arguing that (1) the activity proposed by the Ramu Nickel Environmental Plan 1999 is unlawful, the approval of the Plan is unlawful, and (2) because the mine was not operating on the coming into force of the Environmental Act 2000 the Ramu Nickel Environment Plan 1999 was not saved by the saving provision in s136(3) of the Act and the proposed undersea tailings disposal is unlawful under the Environmental Act 2000.

Held:

Davani and Sawong JJ, (Hartshorn J dissenting):

1. The Respondents are entitled to bring the proceedings for themselves, they do not necessarily represent other landowners at [10]. The trial judge did not err in finding the Respondents had standing; per Davani J at [11];

2. Serious questions are raised in relation to the law of nuisance & whether serious environmental damage will be caused; Davani J at [21]; If the undersea tailings disposal is allowed to proceed the potential environmental harm far outweighs the lifting of the injunction; Sawong J at [128];

3. The Appellants submission that the trial judge misinterpreted s136(3) of the Environment Act must be argued after defences are filed and evidence is tested; Davani J at [31];

4. An appellate court will be very cautious in reviewing interlocutory decisions; Davani J at [38];

5. The trial judge did not exercise his decision upon a wrong principle, take extraneous or irrelevant matters into account, mistake the facts or not take some matter into consideration; Davani J at [40]-[41];

6. The very serious issues raised relating to possible environmental damage are exceptional, the balance of convenience lies in maintaining the injunction and for the issues to go to trial; Davani J at [46]; . One of the key issues is whether the environmental harm that is likely to occur once the pipe line is constructed and the tailings are discharged, is authorized; per Sawong J at [118]; The Court should not brush aside the concerns of the landowners on a narrow basis; Sawong J at [125];

7.The principles upon which a court may grant an interlocutory injunction are well-established, namely, whether there is a serious question to be tried (Hartshorn J concurring at [53]), and discretionary matters such as where the balance of convenience lies and delay, and the provision of an appropriate undertaking as to damages; Sawong at [90] Davani J concurring at [1];

8. The consideration or application of the National Goals and Directive Principles in the Constitution is a serious issue to be tried; Sawong at [121];

9. Whether the common law principles relating to the statutory defence (to the common law action for nuisance) is or are appropriate and applicable to the circumstances of this case in particular and circumstances of PNG in general, is a serious issue to be tried; Davani J at [21], Sawong J at [124];

10. Per Davani and Sawong JJ the appeal is dismissed;

11. Per Hartshorn J (dissenting) [56] A serious question to be tried is not an arguable case that cannot be described as a strong case and which does not have a real possibility of ultimate success; at [61] There is no serious question to be tried, the appellants operated under approvals given under statute; the interpretation of s136(3) of the Environment Act as contended by the respondents is wrong and has no application to the facts, s136(1) is the principle saving provision; the evidence and arguments before the primary judge did not give rise to a serious as opposed to a speculative case; at [71] the lack of evidence of the first appellant's behavior did not entitle the primary judge to find that there was a serious case that the anticipated environmental damage was not an inevitable consequence of the approved plan, thus not giving rise to a statutory defence to a claim in nuisance.

DECISION

Cases Cited

Papua New Guinea Cases

Ariako v Madang Provincial Government [1995] PNGLR 38
Avia Aihi v State [1982] PNGLR 92
Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853
Sir Julius Chan v The Ombudsman Commission of Papua New Guinea [1999] PNGLR 240
Craftworks Nuigini Pty Ltd v. Allan Mott (1997) SC525
Curtain Bros (PNG) Ltd v. UPNG (2005) SC788
Ewasse Landowners Association Incorporated v. Hargy Oil Palms Limited (2005) N2878
Gideon Barereba v. Margaret Elias (2002) N2197
Gobe Hongu Limited v. The National Executive Council & Ors (1999) N1920
Golobadana No.35 Ltd v. Bank of South Pacific Ltd (2002) N2309
Grand Chief Sir Michael Somare v. Ila Geno & Ors (2008) N3406
Kuluah v University of PNG [1993] PNGLR 494
Markscal Limited v Mineral Resource Development Co. Pty Ltd [1996] PNGLR 419
MAS International Ltd v. David Sode (2008) SC944
Moresby North East election Petition, Paterson Lowa v Goasa Damena [1977] PNGLR 429
Ron Napitalai v. PNG Ports Corporation Ltd & Ors (2010) SC1016
New Britain Oil Palm Ltd v. Vitus Sukuramu (2008) SC946
NHC v. Yama Security Services Pty Ltd [2000] PNGLR 69
PNG v Albert [1988] PNGLR 138
Pacific Equities and Investment Ltd v. Melanesian Trustee Services Ltd(2007) N3122
Public Employees Association v Liosi [1988-89] PNGLR 585
Robinson v National Airlines Commission [1983] PNGLR 478
Jerry Singirok v. NEC & Ors (1977) N1590
State v. Sam Akoita & Ors (2009) SC977
Stettin Bay Lumber Company Pty Ltd v Arya Ship Management Ltd (1995) SC488
Southern Highlands Provincial Government v. NHC (2001) N2110
The Government of Papua New Guinea and Richard Harold Davis v Stanley Barker [1977] PNGLR 386 SC123

Overseas Cases

American Cyanide Company v. Ethicon Limited (1975) 1 All ER 594
Caledonian Railway Co. v. North British Railway Co (1881) 6 App cases 114
Marriage v East Norfolk Rivers Catchment Board [1949] 2 All ER 1021
Will of Gilbert 1946 (NSW) LR 318

Counsel:

Mr. C. Scerri Q. C. and Mr. G. Gileng, for the First Appellant
Mr. G. M. Egan and Mr. A. Mana, for the Second Appellant
Mr. I. R. Molloy and Mr. W. Mapiso, for the Third, Fourth and Fifth Appellants
Mrs. T. G. Nonggorr and Mr. R. William, for the Respondents

16th July, 2010

1. DAVANI J: The background of this matter is set out by my brother, Sawong J. Additionally, he has also set out in full the grounds of appeal and the law on the review of exercise of discretion by the primary judge in relation to the grant of interlocutory injunctive orders. I discuss the grounds of appeal and the manner in which the Trial Judge exercised his discretion, in the Court below. But briefly, this is an appeal by the respondents against decisions by the National Court Madang of 19th March, 2010 and 14th April, 2010 where the Trial Judge granted interim injunctive orders then refused an application by the appellants, to set aside those orders.
   

The Writ of Summons and Statement of Claim

2. The Writ of Summons filed by the Respondents in the National Court, Madang on 4th March, 2010 pleads their claim against the Appellants. I have not seen a copy of the Appellants Defence in the appeal books before us. Therefore I can conclude that the Appellants have not filed a defence. I set out in full paragraphs 3 to 24 of the Statement of Claim together with the reliefs sought. They read as follows:
   

"3. In or around January 1999 Ranu Nickel Ltd lodged an application for a Special Mining lease for the Ramu Nickel project and lodged the Ramu Nickel Environmental Plan 1999 for this project with the Fourth Defendant.

3A. On 21 March 2000 the Department of Environment and Conservation approved the Ramu Nickel Environmental Plan 1999 under the repealed legislation the Environmental Planning Act (repealed).

4. On 26 July 2000 the Special Mining Lessee (hereinafter referred to as "SML") was granted to Ramu Nickel Ltd.

5. The SML was subject to numerous conditions including that the lessee shall comply with all the relevant legislation applicable to the lease including that administered by the department of Mining, Office of Environment and Conservation and the Bureau of Water Resources.

6. On 1 January 2004, the Environment Act 2000 came into force and amongst other things repealed the Environmental Planning Act, the Water Resources Act and the Environmental Contaminants Act.

7. The Ramu Nickel Environmental Plan 1999 Approval was saved however pursuant to section 136 of the Environment Act 2000.

8. In 2004 however the China Metallurgical Construction Company (hereinafter referred to as "MCC"), a Chinese State-owned steel company started negotiations to fully finance the operations, including rights to construct, operate and secure off take arrangements for the proposed Ramu Nickel mine.

9. On 9 February 2004 a framework agreement was signed in Beijing by MCC, Ramu Nickel Limited, Mineral Resources Development Company Limited and the Independent State of Papua New Guinea. The Plaintiffs, nor any landowners were consulted nor involved. The framework agreement state that those parties agree in good faith to form a Joint Venture to develop the project and that the "landowners" would be a party to the Joint Venture. The agreement records that Ramu Nickel Limited and the State shall give the mine and all exploitation rights to MCC in exchange for only a 15% interest and that MCC would be responsible for the 100% funding of the project.

10. A Joint Venture Agreement and also a Mining Development contract were signed between MCC, Ramu Nickel Limited and the Independent State of Papua New Guinea in 2005 and the SML was transferred from Ramu Nickel Limited to MCC.

11. A company was registered by its 100% owner MCC to manage and operate the Ramu Nickel mine project and that is the First Defendant.

12. The construction of the mine commenced in 2008 by the First Defendant, but the mine is not yet operational.

13. When operational, the Ramu Nickel mine will be a series of open cut mine pits and a beneficiation plant to produce ore slurry at Kurumbrukari in Madang Province. A slurry pipeline approximately 134km long will transport the ore slurry from the Kurubukari mine site eastwards to the refinery plant at Basamuk Bay on the Rai Coast. The refinery plant will produce nickel metal and a cobalt salt product using acid pressure leaching technology.

14. The Ramu Nickel Environmental Plan 1999 was prepared by NSR Environment Consultants Pty Ltd, an Australian company that has advised companies on 25 ocean disposal projects clustered in 9 countries being Indonesia, Papua New Guinea, New Caledonia, the Philippines, Chile, Fiji, the Solomon Islands, Cuba and Canada.

15. According to the Ramu Nickel Environmental Plan 1999 Approval, the First Defendant will then dump 5 million tones of hot tailings into Astrolabe Bay each year for the life of the mine which is estimated at 20 years, totaling 100 million tones of tailings. The First Defendant will additionally dump waste rock and soil directly into the sea at Basamuk Bay during the construction and life of the mine as well as sewerage from 2500 people for 30 months.

16. This activity of disposing tailings and waste into Basamuk and Astrolabe Bay by the First Defendant and consequently the Ramu Nickel Environmental Plan 1999 Approval will adversely affect matters of national importance within the meaning of the Environment Act 2000, being that these activities will adversely affect:-

(a) The preservation of Papua New Guinea traditional social structures; and

(b) The maintenance of sources of clean water and subsistence food sources to enable those Papua New Guineans who depend upon them to maintain their traditional lifestyles; and

(c) The protection of areas of significant biological diversity and the habitats of rare, unique or endangered species; and

(d) The recognition of the role of land-owners in decision-making about the development of the resources on their land; and

(e) Responsible and sustainable economic development.

17. This disposal of waste by the First Defendant into Basamuk and Astrolabe Bays and consequently the Ramu Nickel Environmental Plan 1999 Approval does not protect the environment from harm and is likely to cause Environmental and or serious environmental harm.

18. This disposal of waste by the First Defendant into Basamuk and Astrolabe Bays and consequently the Ramu Nickel Environmental Plan 1999 Approval will adversely affect the beneficial value of the environment within the meaning of the Environment Act 2000 and will be detrimental to ecological health, public benefit, welfare, safety, health and aesthetic enjoyment and which requires protection from environmental harm.

19. This disposal of waste by the First Defendant into Basamuk and Astrolabe Bays and consequently the Ramu Nickel Environmental Plan 1999 Approval is not the best practice environmental management for this activity.

20. The disposal of waste by the First Defendant into Basamuk and Astrolabe Bays and consequently the Ramu Nickel Environmental Plan 1999 Approval is contrary to Goal 4 of the National Goals and Directive Principles of the Constitution, in that it does not promote sustainable development of the environment and the economic, social and physical well-being of people by safeguarding the life-supporting capacity of air, water, soil and eco-systems for present and future generations, and does not avoid or mitigate any adverse effects of the activity on the environment.

21. Whilst the Ramu Nickel Environmental Plan 1999 Approval was initially saved by the transitional provisions of section 136 of the Environment Act 2000, the environmental harm caused by the activity being the disposal of waste into Basamuk and Astrolabe Bays is not saved, lawful and allowed as immediately before the coming into the operation of the Environment Act 2000 the First defendant was not lawfully carrying on the activity pursuant to an approval under the repealed Acts.

22. As the activity was not being carried on by the First Defendant or anyone else under Ramu Nickel Environmental Plan 1999 Approval at the commencement of the Environment Act 2000, the activity must be subject to the Environment Act 2000, and would not be lawful under that Act, for the reasons set out in paragraphs 16, 17, 18, 19 and 20 of the Statement of Claim and ought to be restrained.

23. Further and/or in the alternative, the activity of dumping waste into the Basamuk and Astrolabe Bays by the First Defendant in reliance on the Ramu Nickel Environment Plan 1999 Approval or anything else, which in addition to the harms as set out in paragraphs 16 to 20 inclusive of this Statement of Claim will and/or will potentially cause:-

• Ore slurry deposits and turbidity in shallow habitats
  
• Condition suitable to Tsunamis
  
• Biological and spatial interference on shallow water and deep water fishes and fauna.
  
• Shallow water habitat change and burial of fauna
  
• Toxic effects from tailings
  
• Tailings brought onshore from upwelling and currents
  
• Turbidity Plumes of sediment, both toxic and otherwise, spreading out horizontally over hundreds of kilometres
  
• Adverse biological impacts on the Goldband Snapper and the Ruby Snapper.
  
• Mortality of Benthic Fauna over a large area
  
• Increased bio concentration of trace metals and eco-toxicological risks to the food web.
  
• Elevated levels of chromium, iron, manganese, nickel and mercury in the marine environment as well as extremely high levels of ammonia which
  
  • - (1) will be ingested by benthic fauna,
    
  • - May/will be acutely and chronically toxic to fish,
    
  • - (3) will create sub-lethal affects as well, reduced growth and gill damage.
    

24. The First Defendant intends, unless restrained by this Court, to commit the said public nuisance and/or private nuisance and injure the Plaintiffs in their use and enjoyment of their customary land and water rights on the Rai Coast..

AND THE PLAINTIFFS CLAIM

(a) A permanent quia temet injunction to restrain the First Defendant by itself, its servants or agents or otherwise however, from committing the said nuisances and to injure the Plaintiffs in their use and enjoyment of their customary land and water rights.

(b) A declaration that the Plaintiffs ought to be consulted by the Defendants and informed on any matter concerning tailings waste disposal concerning the Ramu Nickel mine.

(c) A declaration that an activity that was permitted by an approval, permit or license under the repealed Acts that:

• (i) had not commenced at the time the Environment Act 2000 came into force on 1 January 2004, and
  
• (ii) was an activity that would constitute an offence under the Environment Act 2000.
  

Is not saved by the provisions of Section 136 of the Environment Act 2000.

(d) A declaration that the activity to be commenced by the First Defendant being the dumping of tailings and waste into the Astrolabe and Basamuk Bays is in breach of the Environmental Act 2000 and is unlawful.

(e) In the alternative to (a) a permanent quia temet injunction to restrain the First Defendant from dumping waste and tailings into the Astrolabe and Basamuk Bays in accordance with the Ramu Nickel Environmental Plan 1999 Approval or at all.

(f) Punitive damages against all Defendants

(g) Interest at 8% pursuant to the Judicial Proceedings (Interest on Debts & Damages) Act Chapter 52.

(h) Costs of this action."

3. The Respondents claim is basically that the study called the Ramu Nickel Environmental Plan 1999 demonstrates that the Ramu Nico Management (MCC) Limited ("Ramu Nico") will dump 5 million tonnes of hot tailings into Astrolabe Bay each year for the life of the mine which is estimated to be 20 years, totaling 100 million tonnes of tailings. The Respondents allege that in addition to that, Ramu Nico will also dump waste, rock and soil directly into the sea at Basamuk Bay during the construction and the life of the mine as well as sewerage from 2500 people for 30 months.
   
4. The Respondents allege that this disposal of tailings and waste into Basamuk and Astrolabe Bays by Ramu Nico will adversely affect the lives of the people of that area and as pleaded at paragraph no. 16 of the Statement of Claim, their way of life and their environment, will be destroyed.
   
5. The Respondents claim that this is not the best practice environmental management of this activity. They plead that this is contrary to Goal 4 of the National Goals and Directive principles of the Constitution, the Ramu Nickel Environmental Plan 1999 and the scheme and spirit of the Environment Act of 2000. The Respondents plead that Ramu Nickel's actions d not promote sustainable development of the environment and the economic, social and physical well being of the people by safeguarding the life supporting capacity of air, water, soil and eco-system for present and future generations.
   
6. The alleged serious damage to be caused by this dumping is pleaded at paragraph 16 of the Statement of claim, which is the basis on which the Respondents obtained the interim restraining orders and which restraining orders are also sought in the substantive action before the National Court.
   
7. I now discuss the law and the evidence on the merits of the appeal; whether the trial judge erred and if so, whether the interlocutory injunctive orders should be set aside.
   

Standing

8. The appellants submit that the respondents do not have standing in that they are not suing in a representative capacity. They submit that the respondents do not have the support of the true customary land owners which is why they are proceeding as individuals rather than for and on behalf of a group of people. They submit also that the respondents may also represent a third party who are funding the court proceedings.
   
9. The respondents submit in response, relying on matters pleaded in paragraphs 1(a) (b) (c) (d) (e) of the Statement of Claim. Mrs Nonggorr submits that they do not bring a representative action, rather that the action is by the Plaintiffs named in their capacities as pleaded in the Statements of Claim, being the paragraphs referred to above.
   
10. In my view, the respondents are quite entitled to bring the action that they have brought. They do not necessarily represent the interests of other land owners but themselves. As to the appellants contentions that the respondents are not the true land owners, that is an issue that can only be resolved either in the appropriate arena or by the landowners themselves relying on the knowledge passed down from generation to generation.
    
11. I find the trial judge did not err.
    

II. Serious question to be tried

12. The law on this component is succinctly set out by my brothers Hartshorn and Sawong, JJ.
    
13. The first aspect of this is s. 136 of the Environment Act 2000. The respondents plead at paragraphs 21 and 22 of the Statement of Claim that the environmental harm to be caused by the disposal of waste into Basamuk and Astrolabe Bay is not saved under that provision and that therefore Ramu Nico was not lawfully carrying out that activity. The Statement of Claim pleads that because those activities were not carried out by Ramu Nico under the Ramu Nickel Environmental Plan 1999 as at the commencement of the Environment Act 2000, that the activity must therefore be subject to the Environment Act 2000 and is not lawful under that Act for reasons set out in paragraphs 16, 17, 18, 19 and 20 of the Statement of Claim and ought to be restrained. I have already set out in full paragraphs 16 to 18 of the Statement of Claim which all go towards the pleading of the alleged damage to be caused to the environment.
    
14. The Appellants submit that no serious questions arise under s. 136 of the Environment Act 2000. They submit amongst others, that the construction of the deep sea tailing placement system is authorized under the repealed Environment Planning Act and the Environment Act 2010 and s. 28 of the Environment (Permits and Transitional) Regulations. They submit that s. 3(3) of the Environment (Permits and Transitional) Regulation No. 3 of 2010 allowed this because it provides that:
    

"For the Avoidance of doubt, a holder of an authorization instruction is entitled, to carry on any activity pursuant to or specified in the authorization instrument (including all necessary or inevitable act or works that relate to or are associated with the carrying on of such activity), and the carrying on of such act, works or activity does not constitute an offence and is not unlawful."

15. What did the Trial Judge say about this? The Trial Judge considered submissions by the appellants in the court below, same or similar arguments that are now raised.
    
16. After the application for injunctive orders was made on 19th March 2010 and in his reasons, the Trial Judge said this:
    

a. "...there are serious issues to be tried, particularly concerning whether the environmental approval for the deep sea tailings placement is lawful"(AB 404, (Vol. 2), first para.);

b. There was a serious issue in relation to the approval under section 136(3) of the Environment Act 2000 because para. (a) of that section did not apply, and "Therefore the operation of the tailings displacement was not 'saved'. (AB 404, Vol. 2, second para.). On the same page His Honour described this as raising 'important questions of interpretation' and an 'arguable case'."

17. Further, in his reasons of 19th March 2010, the Trial Judge after considering all submissions by both counsel said:
    

"I am satisfied that important questions of interpretation of the Environment Act 2000 are raised through the Statement of Claim. The prospects of the plaintiffs succeeding cannot be dismissed at this stage as bleak. An arguable case exists. "(Appeal Book pg.404, Vol. 2).

18. Aggrieved by this decision, the respondents then applied to set aside, which the Trial Judge refused on 14th April, 2010.
    
19. The Trial Judge when considering the application to set aside considered the numerous extensive materials put before him by the appellants. In fact, the Trial Judge considered in great detail the submissions by counsel and did not shirk from his duties in relation to the requirement to consider new material that was not available to him and to rehear again, the submissions before him in March, together with additional new material. In his reasons of 14th April, 2010 on the application to set aside the interim injunctive orders, His Honour said this;
    

"The defendants argue that the plaintiffs' interpretation of Section 136(3) is skewed and erroneous. Section 136(3), they argue, is irrelevant to this case as MCC's proposed deep sea tailings placement system has been authorized by the repealed Environmental Planning Act and saved under Section 136(1) of the Environment Act 2000, and therefore the carrying on of that activity cannot constitute an offence under the Environment Act.

Mr Molloy, for MCC, raised a number of significant legal arguments concerning Section 136 that seem to cast doubt on the sustainability of this aspect of the plaintiffs'case. Ms Aikung, for the Mineral Resources Authority, added weight to the argument by referring to the Environment (Permits Regulation 2002, particularly Section 28 (transitional arrangements). However, I am not dissuaded from the view I expressed when ruling on the motion for an interim injunction that important questions of interpretation of the Environment Act 2000 are raised through the statement of claim and that the prospects of the plaintiffs succeeding cannot be dismissed as bleak and that an arguable case exists.

Previously undisclosed material facts

The court now has before it a lot of affidavit material deposing to the statutory approval relied on by MCC to authorize the operation of its deep sea tailings placement system. Mr Molloy emphasized that MCC was not just relying on the statutory approvals given under the repealed Environmental Planning Act. There has been a series of approvals and amendments of approvals and a consistent course of interaction and consultation between MCC and the Director of Environment and the Department of Environment and Conservation. The defendants point in particular to a permit issued by the Director of Environment in November 2007 which specifically authorizes the construction of a deep sea tailings placement system. The consultation has continued to as recently as 10 March 2007 with a letter from the Department to MCC's project director, Dr James Wang. The defendants therefore argue that there is no case for saying that MCC's conduct could be regarded as unlawful. There can be no private nuisance or public nuisance established (they being the principal causes of action relied on by the plaintiffs) as MCC is acting under statutory authority.

Mrs Nonggorr, for the plaintiffs, counters those arguments by submitting that, though the plaintiffs still wish to argue that MCC does not have statutory approval under the Environment Act, if the court finds against them on that issue, they will argue that the existence of statutory approval does not necessarily provide a complete defence to a claim of private nuisance or public nuisance. They want to rely on the common law of nuisance – which they say has been adopted as part of the underlying law of Papua New Guinea – and the principle that statutory approval of a nuisance-generating activity is only a defence to a nuisance claim when it is an 'inevitable consequence' of the activity that has been authorized by statute.

I consider that this is an arguable issue, especially as there appears to be no provision in the Environment Act that says that the granting of an environment permit or other statutory approval indemnifies or protects the person undertaking that activity against all common law-based claims for damages arising from it. It is certainly not something that has been decided previously by the National Court or the Supreme Court. In fact there are very few reported PNG cases on the law of nuisance, just as there are very few cases in which the courts have been required to interpret and apply the provisions of the environmental laws." (Appeal bk.Vol. 12 pg. 3324, 3325).

20. His Honour was of the view that although the respondent had raised significant legal argument, that these arguments deserved thorough consideration at a trial and were not sufficiently compelling to demonstrate that the interim injunction was granted on an erroneous legal bases or that there was no serious question to be tried or that the plaintiff did not have a prima facie case.
    
21. On this point, firstly, the evidence before the Court is all untested. Although the appellant urged the court to consider evidence and submissions put before us based on the legal issues raised. I am of the view that it is premature at this stage to do this considering there are very serious issues raised in relation to the law of nuisance and whether serious environmental damage will be caused, more particularly where the trial judge had extensive affidavit material from environmental scientists who are saying quite clearly that the proposed deep sea tailings placement system will have substantial negative effects on the marine environment. (pg 332 and vol. 12 Appeal Book).
    
22. Lastly, the Appellants raise statutory Defences which have not been pleaded in a formal Defence. I say this because the appeal books do not disclose a filed Defence. A party cannot raise a statutory Defence that has not been pleaded. (O. 8 R. 14 of National Court Rules ('NCR"); O. 8 R. 20 of NCR). If the appellants have been raising these Defences without firstly pleading them, then these Defences are non-existent. The appellants should now properly go back to the National Court and file these Defences.
    

III. Delay

23. The appellants argued before the trial judge and also to this Court that the trial judge erred when he said that there was no delay because of the fact that the environmental plan for the Ramu Nico Project was originally granted in 1999, and that it had been known for some years that the deep sea tailings placement systems was the preferred and proposed method of tailings disposal from the mine. At the National Court hearing, the appellants argued that the delay is manifest from the respondents own material which are some affidavits which were sworn in 2009 but were only filed and served in March 2010. In response to that, the Trial Judge took into account respondents submission that as landowners they have been kept in the dark for many years in that they were waiting for another environmental report on the deep sea tailings placement system and were promised by government representatives that this would occur but which did not occur. The Trial Judge found that this is an explanation that can only be tested at a trial.
    
24. Another issue that is now apparent after hearing all counsel is how the processes in relation to issuances of permit etc are made known to landowners and interested parties where the only means of making this known is either in the daily newspaper or the Government Gazette. The appellants submit that the propriety or not of the issuance of this permit is not an issue because an action for Judicial Review challenging these processes was earlier dismissed by the trial Judge. However, the reliefs sought by the plaintiff more particularly reliefs (d) and (e) set out above in the Statement of Claim will require that evidence be called by the parities on this issue.
    

5. Undertaking as to damages
   

25. The appellants submit that the undertaking given by the respondents are worthless because they will not be in a position to pay the billions of kina now being lost by Ramu Nico as a result of the injunction being in place. Firstly, there is no evidence before this Court of the monies allegedly lost by Ramu Nico as a result of its non-activity in the Basamuk and Astrolabe Bay.
    
26. The trial judge succinctly summed this up when he said that if the Court were to insist on Plaintiffs being adjudged financially capable of meeting all undertakings, that there is a danger the National Court may be closing its doors to the citizens of Papua New Guinea. That the Court should instead be largely focused on the genuineness of a plaintiff's motives.
    
27. And, this is when it is relevant to consider that this is not a claim by persons seeking to reap the benefits out of a mining venture. These are persons who wish to protect the environment that they live in. There are many affidavits in the appeal books before us deposed to by villagers who say what the sea in its pristine form is used for, that products from the sea is used for food and material for their day to day living, amongst others and that when this is destroyed, the respondents life style is also destroyed.
    

Other matters raised in grounds of appeal

28. Activity under s. 136(3) of the Environment Act 2000 is an offence.
    
29. The appellants submit that the Trial Judge misconstrued s. 136(3) of the Environment Act 2000 in that he should have found that, that provision only applies to an activity that is an offence under that Act. They submit that this appellant's activity or intended activities was not an offence. I set out s. 136 (1), (2) and (3) of the Environment Act 2000. It reads:
    

"Approvals, permits, licences, etc., to continue in force.

(1) Subject to this section –

• (a) an approval granted under the Environmental Planning Act (repealed); and
  
• (b) a permit and licence granted under the Environmental Contaminants Act (repealed); and
  
• (c) a permit (including a water investigation permit) issued under the Water Resources Act (repealed).
  

Valid and in force immediately before the coming into operation of this Act, shall –

(d) continue, on that coming into operation, to have full force and effect for the term for which they were granted or until they sooner expire or are revoked according to law as if the Act under which they were granted had not been repealed; and

(e) be deemed to be corresponding permits for the purposes of this Act and may be dealt with in accordance with the provisions of this Act as if they had been issued under this Act.

(2) Where, prior to the expiry of a permit, licence or approval referred to in Subsection (1), the holder has applied for a permit under this Act, the permit, licence or approval granted under the repealed Act shall continue to have full force and effect until the application for a permit has been determined in accordance with Sections 60 to 69 inclusive.

(3) Where, immediately before the coming into operation of this Act –

(a) a person was lawfully carrying on an activity pursuant to a permit, licence or approval under the repealed Acts which is deemed to be a permit by virtue of Subsection (1); and

(b(13)) the activity would constitute an offence under this Act, the person is entitled, subject to this section and to the permit, to carry on the activity and the carrying on of the activity does not constitute an offence.

30. This issue was dealt with by the trial judge at p. 3324, 3325 of Appeal Book Volume 12. I have set this out in full above.
    
31. There, His Honour found that these were arguable issues. The respondents submit that the existence of statutory approval does not necessarily provide a complete Defence to a claim of private nuisance or public nuisance. The respondents submit that the common law of nuisance should be adopted as part of the underlying law of Papua New Guinea. The appellants submit otherwise. In my view, proper submissions and evidence must be made by all counsel on these points of law and the evidence, to be tested on cross-examination. In addition to that, as I stated above, the statutory Defence must be specifically pleaded before they can be raised, if not already done. As I have not seen copies of Defences by all appellants, I assume that, the Defences will be filed and served immediately after this adjournment.
    

II Does the balance of convenience favour the refusal of an interlocutory injunction more particularly the respondents alleged delay?

32. I addressed this above, when I took into account the trial judges consideration of this by his referral to the landowners having been kept in the dark for many years whilst waiting for another environmental report on the deep sea tailings system; and the fact that the trial judge found that this was an explanation that can only be tested at trial.
    

3. Permit issued under the Environment (Permits Regulations 2003).
   

33. Counsel, more particularly Mr. Egan and Mr Scerri, Q.C, referred the Court to process in that regulation having been complied with and the fact that this should not be raised now, the proper arena being Judicial Review, but that Judicial Review proceedings are now non-existent, having been dismissed earlier. As I pointed out above, parties who will most likely be aggrieved by the publication of such notices are landowners. Landowners are more often than not, resident in their villages. As to whether they had access or notice of this publication is an issue that can be raised and canvassed at trial and which the trial judge noted when he said that important questions of interpretation of the Environment Act 2000 are raised and he said this after referring to submissions by Mr. Molloy for Ramu Nico and Miss Aikung for the Mineral Resource Authority.
    

Conclusion

34. The jurisdiction of the Supreme Court to interfere with the exercise of discretion of a National Court Judge has been discussed in a number of cases.
    
35. In the case of The Government of Papua New Guinea and Richard Harold Davis v Stanley Barker [1977] PNGLR 386 SC123 Supreme Court bench consisting of the then Frost CJ, Prentice DCJ and Kearney J examined the principles applicable at pg. 397;
    

"This being an appeal against the exercise of discretion, it must I think, be shown to this Court that the Judge in Chambers exercised his discretion upon a wrong principle, has allowed extraneous or irrelevant matters to guide or affect him, mistaken the facts, or not taken into account some matter for consideration. Then and only then (Lovell v. Lovell (1950) 8 C.L.R 192 at p. 199), the lower court having been shown to be clearly wrong in its decision (Australian Coal and Shale Employees' Federation v. The Commonwealth and Others [1953] HCA 25; (1953) 94 C.L.R. 621), or it appearing that otherwise injustice will be done (Evans v. Bartlam [1937] A.C. 473 at p.480), the appellate court may exercise its own discretion in substitution for that of the lower court, if it has the material for doing so."

36. This decision was cited and applied in the 1995 Supreme Court case of SC488 (2005), Stettin Bay Lumber Company Pty Ltd v Arya Ship Management Ltd. [1995] PGSC 7.
    
37. In the case of Sir Julius Chan v The Ombudsman Commission of Papua New Guinea [1999] PNGLR 240, the Supreme Court considered the principles to apply when considering whether to grant leave to appeal from the exercise of a judge's discretion at first instance.
    
38. . The majority in that case, Justice Sheehan and Jalina JJ, reviewed the case law in Australia and other jurisdictions relating to when an appellate court will review an interlocutory decision of a lower court. Their Honours noted that Australian decisions show that an appellate court will be very cautious in reviewing interlocutory decisions, (my emphasis) particularly those involving an exercise of discretion in matters of practice and procedure. They quote Jordan J in Will of Gilbert 1946 (NSW) LR 318:
    

"there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges at first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercise of discretion in interlocutory applications from a judge in chambers to a court of Appeal".

39. The grant of injunctive Orders such as those under appeal are clearly an interlocutory decision wherein the judge at first instance properly exercised his discretion. The respondents submit that the above principle is precisely relevant to this matter because if this court were to uphold the appeal, it is effectively determining the appellants substantive rights and is an interference with the trial judges orders, if the appellant does not show that;
    
    1. The trial judge exercised his discretion upon a wrong principle;
       
    2. or that he allowed extraneous or irrelevant matters to guide or affect him;
       
    100. or he mistook the facts;
         
    4. or that he did not take into account some matters for consideration.
       
40. But, as I found above, none of that occurred. The trial judge was very clear in his interpretation of the facts and the law and in the exercise of that discretion, and also, did not determine any substantive rights.
    
41. In Sir Julius Chan (supra), the majority considered other examples of the Australian High Court and English authorities, noting a general reluctance to interfere with discretionary interlocutory decisions. There Honours then noted that in PNG:
    

"only in exceptional circumstances should there be a need for intervention before it (a lower court) makes a final determination'

(my emphasis)

42. Their Honours quote Prentice DCJ in Moresby North East election Petition, Paterson Lowa v Goasa Damena 1977 PNGLR 429:
    

"that as a general rule the Supreme Court should not interfere with a National Court hearing until it had reached a conclusion....finality should normally be obtained in the National Court before appeal were sought there from".

43. Prentice DCJ went on to comment on the "potentially catastrophic effects" too ready intervention during trial, can have on the processes of lower courts.
    
44. Their Honours in Sir Julius Chan (supra) concluded that there must be "serious jurisdictional error before intervening prior to a Court or tribunal making its final determination".
    
45. Their Honours then considered when it might be proper to interfere with a discretionary interlocutory decision of a lower court, as follows:
    
    1. "exceptional circumstances"- Avia Aihi v State (1982) PNGLR 92, PNG v Albert (1988) PNGLR 138.
       
    2. Showing an arguable case that is one of "cogent convincing reasons on clear legal ground"s – Moi Avei & Election Commission & Charles Maino SCA (1998) 584.
       
46. The appellants are firm in their contentions that the trial Judge has erred in the manner in which he interpreted the law and that therefore, the appeal should be upheld and the injunctive orders set aside. However, I find that the balance of convenience lies in maintaining the status quo until after the trial of the substantive matter, considering the very serious issues raised by the respondents in relation to possible extensive environmental damage. The reasons advanced by the respondents, I find, are exceptional, notwithstanding the appellants urging to uphold the appeal. This matter must be properly resolved at a full trial rather than be brought to an abrupt end at this interlocutory stage, before properly testing the waters.
    
47. Therefore, it follows, that the appeal must be dismissed.
    
48. HARTSHORN J. (Dissenting) I have had the opportunity of reading the draft decisions of Justice Davani and Justice Sawong. I find myself in the minority as I respectfully am not able to agree with their Honours in their determination that the primary judge did not fall into error in finding that the Respondents have serious issues to be tried.
    
49. Justice Sawong has set out the facts and grounds of appeal in his decision and for me to do likewise would be repetitious. After a brief consideration of the law as to this Court's role in an appeal from an exercise of discretion and as to injunction, I will address the primary judge's consideration of whether the Respondents have serious questions to be tried.
    

Review of exercise of discretion by primary judge

50. As to this Courts role in an appeal from the exercise of judicial discretion, I make reference to the decision of Curtain Bros (PNG) Ltd v. UPNG (2005) SC788 and reproduce the following passage from that decision:
    

"The appellant Court will not interfere with a discretionary judgment on a procedural matter within its jurisdiction, except where the exercise of that discretion is clearly wrong. A discretionary judgment may be set aside if an identifiable error occurred in the exercise of discretion. Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is "unreasonable or plainly unjust" and such that an error can be inferred. These principles are well established. We adopt a passage from Kitto J in the Australian High Court case of Australia Coal and Shale Employees' Union v The Commonwealth [1953] HCA 25; (1956) 94 C.L.R. 621 at p.627, which was adopted by Clarkson J. in Breckwoldt & Co. (N.G.) Pty Ltd v. Gnoyke [1974] PNGLR 106 at p.112 – 113:

"The decision by the primary judge to stay the action was made in exercise of a judicial discretion and I accept that in those circumstances the principles on which this Court should act are as described by Kitto J. in Australian Coal and Shale Employees' Union v The Commonwealth ... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgements is that there is a strong presumption in favour of the correctness of the decisions appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance..."

51. This passage has been agreed with and adopted by this court in State v. Sam Akoita & Ors (2009) SC977 and Ron Napitalai v. PNG Ports Corporation Ltd & Ors (2010) SC1016. I am satisfied that the principles referred to are applicable here.
    

The decisions appealed

52. The Appellants submit that the primary judge fell into the type of error that calls for the intervention of an appellate court. Further, the primary judge committed the same or similar errors in both his initial decision to grant an interim injunction and his decision to refuse to discharge the injunction. The difference between the two decisions is that at the initial hearing, the primary judge did not have before him all of the material that he had at the second hearing. Apart from that, as the issues and parties of each hearing were

substantially the same, the Appellants argued the appeal from each decision together.

Law on injunctions

53. The law on injunctions is settled in this jurisdiction. Injunction is an equitable remedy. It is a matter for the discretion of the Court to refuse or grant the relief sought. In order for an injunction to be granted, the applicant must demonstrate to the Court that there is a serious case to be tried on the substantive proceedings. The leading authority is a decision of the House of Lords in American Cyanide Company v. Ethicon Limited (1975) 1 All ER 594. This case has been followed on many occasions in this jurisdiction and cited with approval by the Supreme Court in Craftworks Nuigini Pty Ltd v. Allan Mott (1997) SC525 and Chief Collector of Taxes v. Bougainville Copper Ltd (2007) SC853. The authorities also agree that once it has been determined that there is a serious question to be tried, if damages could adequately compensate the applicant, the injunction should not be granted: Golobadana No.35 Ltd v. Bank of South Pacific Ltd (2002) N2309, Ewasse Landowners Association Incorporated v. Hargy Oil Palms Limited (2005) N2878, Gobe Hongu Limited v. The National Executive Council & Ors (1999) N1920.
    

Serious questions to be tried

54. As to what constitutes a serious question to be tried, in Robinson v National Airlines Commission [1983] PNGLR 478 at 482 Andrew, J. stated:
    

"What the Plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success..."

55. 28. In Markscal Limited v Mineral Resource Development Co. Pty Ltd [1996] PNGLR 419 Doherty, J. described this as:
    

".... a strong case which, on the evidence presented would support a permanent injunction".

56. These statements have been cited with approval in numerous authorities including: MAS International Ltd v. David Sode (2008) SC944, Jerry Singirok v. NEC & Ors (1977) N1590, Gobe Hongu Ltd v. NEC (1999) N1920, NHC v. Yama Security Services Pty Ltd [2000] PNGLR 69, Southern Highlands Provincial Government v. NHC (2001) N2110, Gideon Barereba v. Margaret Elias (2002) N2197 and my own decisions of Pacific Equities and Investment Ltd v. Melanesian Trustee Services Ltd (2007) N3122 and Grand Chief Sir Michael Somare v. Ila Geno & Ors (2008) N3406. It is not sufficient that there only be an arguable case that cannot be described as a strong case and which does not have a real possibility of ultimate success.
    

Section 136 Environment Act 2000

57. The Appellants submit that the primary judge erred in law and fact in his reasoning when he said, ".... there are serious issues to be tried, particularly concerning whether the environmental approval for the deep sea tailings placement is lawful....."
    
58. The Appellants submit amongst others that:
    

a) the Department of Environment and Conservation approved the Ramu Nickel Environment Plan 1999 under the now repealed Environmental Planning Act. This is acknowledged by the Respondents. The Approval terms and conditions include the construction and operation of a deep sea tailings placement system,

b) there was evidence that the Approval was granted under the now repealed Environmental Planning Act,

c) before the Approval was granted the Environmental plan was independently reviewed by experts. In particular, the evidence before the primary judge disclosed the following studies:

(i) Dames Moores Report to the Department of Environment and Conservation states:

"(4) REVIEW OF DSTP DESIGN

We concur with the main features of the DSTP system as proposed, specifically the proposals for de-aeration and the outfall dept of 150m. Our own experience would lead us to some differences in design. However, we should emphasize that we do not see any "fatal flaws" in the design proposed.

(6) REVIEW OF PREDICTED IMPACTS

We agree with NSR that only impacts to the shallow environment will be localised direct disturbance and short term turbidity during installation of the scabbed pipelines. Recovery should be rapid and total.

(9) SUMMARY AND CONCLUSION

Overall, we consider that the proposed tailings system is appropriate to the situation and, in all possibility, represents the option with lowest environmental impact and lowest risk to life and property. There is potential, in our view for further optimisation of the DSTP system during detailed design."

(ii) During 2000 and 2001, the CSIRO of Australia conducted a 12 month Oceanographic Study at Basamuk which concludes that:

"The southward flow does not necessarily imply upwelling at those times because the flow could have deviated east or west near the coast.

(iii) Coffey Natural Systems Pty Ltd of Australia submitted a comprehensive review assessment which concludes that no adverse effect will result from DSTP.

(iv) HAYCO in the Report titled Ramu Nickel Deep Sea Tailings Placement System Basic Design stated at clause 3.12 that:

"The goal of deep sea tailings disposal systems is to move the tailings from the end of the outfall pipe to the deep sea ocean basins, with minimal deposition in the shallow water near the outfall. It has been observed at various outfall sites that tailings which are sufficiently fine form a density current which flows along the seabed."

(v) the report prepared by Cardino Acil who were engaged by the Department of Environment and Conservation to "....advise the Director of Environment (PNG) on the integrity of the DSTP design and the related risks with the relevant management options identified" said that "There are no matters identified in the documents provided which appear to be of sufficiently serious nature as to prevent the project proceeding."

d) the thrust of the Respondents claim is that the First Appellant, Ramu Nico Management (MCC) Ltd (MCC)'s proposed activity, being the construction and operation of deep sea tailings, is not authorised by law as it would cause environmental harm. The Respondents claim that under the Environment Act 2000, 'If there is anything going on that would be considered unlawful under the current Act, it is only saved if the Activity was actually being conducted at the time of coming into operation of the Act and that was 1 January 2004 and nothing was going on then...'

e) MCC submitted in the National Court and submitted to this Court that the Approval of the Environmental Plan 1999 is saved under section 136(1) of the Environment Act 2000 and section 28 of the Environment (Permits and Transitional) Regulation. According to those provisions, the Approval granted under the repealed Act in force immediately before the coming into operation of the new Act continued to have full force and effect and were "deemed to be corresponding permits for the purposes of the Environment Act 2000 and could be dealt with in accordance with the provisions of this Act as if they had been issued under this Act."

f) s. 136 (3) Environment Act 2000 provides that:

"136 Approvals, permits, licenses, etc., to continue in force

(3) Where, immediately before the coming into operation of this Act-

(a) a person was lawfully carrying on an activity pursuant to a permit, license or approval under the repealed Acts which is deemed to be a permit by virtue of Subsection (1); and

(b) the activity would constitute an offence under this Act,

the person is entitled, subject to this section and to the permit, to carry on the activity and the carrying on of the activity does not constitute an offence."(underlining added)

g) s.136(1) is the principal saving provision whereby Approvals granted under the repealed Acts are continued and are deemed to be corresponding Permits under the new Act. Section 136(3) deals with the situation where a permit granted under the repealed legislation authorises a certain activity but under the new Act that same activity is an offence.

h) MCC submits that section 136(3) is intended to deal with the situation where a person, at the time the Environment Act 2000 came into force, was conducting an activity under an Approval granted under the repealed Acts and that activity would constitute an offence under the new Act, that person can continue to carry out that activity. However section 136(3) has no application here as the proposed activity, being a deep sea tailing placement system approved under the repealed legislation, is not an offence under the Environment Act 2000.

i) MCC submits that section 136(3) has no application as none of the activities including the deep sea tailings disposal placement system approved under the Environmental Plan 1999 is an offence.

j) pursuant to Section 65(1) of the Environment Act 2000, the Director may grant a Permit if he is satisfied of the matters stated for the application. Upon the issue of the Permit, the Director shall specify the conditions for which the permit is granted having regard to such matters as the objects of the Act, matters of National importance, general environmental duty, relevant environmental policy; etc. Section 71 of the Environment Act 2000 empowers the Director to amend a Permit where he is satisfied of the matters set out in s. 65(1). A Permit includes an Approval granted under the repealed Act.

k) even if the Approval granted under the repealed legislation was not saved as submitted by the Respondents, there was evidence before the primary judge that MCC has other authorisation under the Environment Act 2000 and has been granted a number of permits and amendments to the existing permit as the project has progressed. Specifically, a permit was issued to MCC in November 2007 which authorises the construction of a deep sea tailings system. There was further evidence that MCC was working in close consultation with the Department of Environment and Conservation.

59. The Respondents submit that the Environmental Plan Approval is in breach of the National Goals and Directive Principles of the Constitution and the scheme and spirit of the Environmental Act 2000. I am of the view that this submission concerns whether the Approval should have been given and does not recognize that Approval was given. To that extent, the submission would be more relevant in proceedings for judicial review.
    
60. Given the evidence that was before the primary judge at both hearings and after considering the submissions of counsel, I am unable to conclude that the primary judge was entitled to form the view that there is a serious question to be tried that s. 136 (3) Environment Act 2000 should be interpreted as submitted by the Respondents. The interpretation favoured by the Respondents, to my mind, involves an incorrect reading of s. 136 (3) and the savings provisions of the Environment Act 2000. In this regard I refer to the maxim of statutory interpretation referred to in the Supreme Court decision of New Britain Oil Palm Ltd v. Vitus Sukuramu (2008) SC946, that when there are two possible interpretations of a provision and one is reasonable and the other is less reasonable or leads to an absurdity the court will adopt a more reasonable interpretation: Caledonian Railway Co. v. North British Railway Co (1881) 6 App cases 114.
    
61. Further, even if the Respondents construction of s. 136 (3) Environment Act 2000 was to be favoured, the fact that there was evidence of other authorization under the Environment Act 2000 which authorizes the construction of a deep sea tailing system, also leads me to the conclusion that the primary judge was not entitled to form the view, indeed I respectfully fail to see how the primary judge could form the view, that there is a serious question to be tried as to whether the environmental approval for the deep sea tailings placement is lawful. That is, on the evidence that was before the primary judge, the arguments of the Respondents on these points are not such that they give rise to a serious as opposed to a speculative case which has a real possibility of ultimate success, or a strong case which would support the substantive relief sought in the Respondents' statement of claim.
    

Public and private nuisance

62. MCC submits that the primary judge erred in law and fact in his reasons for refusing to set aside the injunction in relation to "the principle that statutory approval of a nuisance –generating activity is only a defence to a nuisance claim if the nuisance is an inevitable consequence" of that activity that has been authorised by statute.
    
63. It is a defence to a claim for public or private nuisance if a defendant is acting under a statutory authority. Street on Torts, Sixth Edition, pages 94 - 95 under the heading "Defences to Intentional Torts to the person and property – Statutory Authority says:
    

"Public bodies and officials may only do acts which would be unlawful in others if they are authorised to do them by statute. Of course, as government has become increasingly regulatory and far – reaching in its effects, more and more such powers have been given. The question before the courts in tort cases of this type is whether the act in question authorised the official to commit the tort complained of.

Certain guiding principles have been worked out by the courts in order to answer this question. Either duty or a power to do the act will afford a defence. The defendant must prove that the tort would be an inevitable result of performing the act authorised: if, for instance, a local authority built an efficient electricity generating station, the fumes from which damaged crops of the plaintiff, they would only have a defence if they proved not merely that an efficient station had been built, but also that they had used all reasonable care in the light of current technical and scientific skills to prevent the commission of a tort; however, they have an absolute defence, regardless of proving these precautions, if they can discharge the very heavy burden of proving that the Act authorised them to disregard these matters."

64. MCC was granted all necessary statutory Approvals under the Environmental Planning Act and the granting of those approvals and subsequent permits and approvals was supported by many independent scientific studies.
    
65. Section 7 of the Environment Act 2000 relevantly provides:
    

7. General environment duty

(1) A person shall not carry out an activity that causes or is likely to cause an environmental harm unless the person takes all reasonable and practicable measures to prevent or minimise the environmental harm.

(2) .............;

(3) Failure to comply with the general environmental duty does not constitute an offence or give raise of itself to a right to civil remedy, but compliance with the duty may be enforced by –

(a) an Environment Protection Order; or

(b) a Clean –up Order; or

(c) an Emergency Direction.

(4) Where in a proceeding it is alleged that a person failed to comply with the general environmental duty by causing environmental harm, it will be a defence if the harm is caused in the course of complying with an Environmental Code of Practice or authorized to be caused under –

(a) an Environment Policy; or

(b) a condition of an environment permit; or

(c) an approved environmental improvement plan; or

(d) an Environment Protection Order; or

(e) an Emergency Authorisation.

66. This section confirms and gives statutory effect to the principle that an action does not lie in public or private nuisance for conduct that has been authorised under statute.
    
67. MCC further submits that s. 129 of the Environment Act 2000 provides for compensation to be paid to any person including the State who suffers injury or damage as a result of an offence under the Act. Although there is no case in this jurisdiction on point on this issue, in Marriage v East Norfolk Rivers Catchment Board [1949] 2 All ER 1021, the Court held:
    

"where a statute empowering the execution of a variety of works gave to the statutory authority wide powers, which necessarily involved the possibility of interference with the rights of others, and expressly provided a remedy by way of compensation, a person who sustained injury through the carrying out of operations authorised by the statute had no right of action for nuisance; and therefore, as the injury sustained by the plaintiff was occasioned by a normal drainage operation, carried out in the usual way, under the powers given to the catchments board by s. 34 (1) of the Land Drainage Act, 1930, the plaintiff's only remedy for the injury of which he complained of was to claim compensation under s. 34 (3) of the Act."

68. Based on the Marriage v. East Norfolk Rivers case (supra), MCC submits that s. 129 of the Environment Act 2000, provides for statutory compensation if an offence for which a person is convicted has caused damage or injury to a person who has suffered loss or damage by reason of the offence. MCC submits further that it was granted statutory approval to construct and operate a deep sea tailings system at Basamuk pursuant to the repealed Environmental Planning Act which is deemed to be a permit under s. 136 (1) Environment Act 2000 and s. 28 Environment (Permits and Transitional) Regulation 2002.
    
69. The Respondents submit that s. 7 Environment Act 2000 does recognize that there will be claims in nuisance and that the defence of statutory authority is limited to harm authorised to be caused under the Environmental permit.
    
70. In this instance there was no evidence before the primary judge that MCC has or will conduct activities outside those authorised, or that it has or will act negligently.
    
71. From a consideration of the above, even if there is an arguable issue that statutory approval of a nuisance-generating activity is only a defence to a nuisance claim if the nuisance is an "inevitable consequence" of that activity, given the lack of evidence as described as to MCC 's conduct before the primary judge, I am unable to conclude that the primary judge was able to find that there is a serious as opposed to a speculative case which has a real possibility of ultimate success. In finding as he did, I am satisfied that the primary judge fell into error.
    
72. In the circumstances and for the reasons already given, I am of the view that the primary judge erred in finding that there were serious questions to be tried. Given that the finding of a serious question to be tried is a prerequisite for the grant of an injunction and the primary judge erred in finding such questions, the appeal should be allowed on this ground alone. As a consequence of the view that I have formed, it is not necessary for me to consider the other submissions of counsel. I am respectfully of the view that the appeal should be upheld.
    
73. SAWONG J: The Appellants filed a Notice of Appeal against the decisions of the National Court (Cannings J) given or made on 19 March 2010 and 14 April 2010 in Madang granting an interim injunction and refusal to discharge the interim injunction.
    
74. The First Appellant is constructing the Ramu Nickel Mine Project in Madang Province. The large scale construction started in 2008 and is now at the completion stage. The construction works at the Kurumbukari Mine, slurry pipeline from Kurumbukari to Basamuk, Madang administration building and the refinery at Basamuk have all been substantially completed. The Project is due to start commissioning from June 2010 and be put into operation within 2010. The Project development cost is 1.4 billion USD dollars and more than 1.2 billion USD dollars and more than 1.2 billion USD dollars has been spent.
    
75. By Writ of Summons filed on 4 March 2010 the Plaintiffs (Respondents hereinafter) commenced proceedings in the National Court in Madang. They are four individuals and an Incorporated Land Group. However the claims are not brought in a representative capacity. Among the four individuals, it appears that the first plaintiff is Ward Councillor, and the second a Ward Secretary.
    
76. The Respondents' claims for relief include a permanent injunction restraining the First Appellant, its servants and agents from committing an alleged nuisance, a declaration that the First Defendant's (First Appellant hereinafter) future conduct of depositing waste into the sea is unlawful, and a permanent injunction restraining the First Appellant from disposing of waste into the sea in accordance with the Ramu Nickel Environment Plan 1999. The Respondents also claim punitive damages against all Appellants (although no loss or damage is alleged) together with interest and costs.
    
77. By Notice of Motion filed 4 March 2010 (and initially returnable on 5 March) the Respondents applied for various forms of interim injunctive relief. Their principal complaints concerned the construction of a deep sea tailings placement system and the disposal of mine waste into the sea.
    
78. By Notice of Motion filed on 10 March 2010 the first Appellant applied for an adjournment of the application. The First Appellant contended that the Plaintiffs' Writ of Summons, Notice of Motion, two Undertakings As To Damages, and five Affidavits were only served on its lawyers (in Port Moresby) at 2.00pm on 8 March 2010. See Gileng Affidavit, paragraph 2. It was claimed that the First Defendant had insufficient time to deal with the Plaintiffs' allegation and prepare and file its response, prior to the then return date of 11 March 2010.
    
79. 47. On 11 March 2010, the First Appellant's application for an adjournment succeeded only to the limited extent that the Respondents' application for an interim injunction was adjourned to (and was heard) the next day.
    
80. On 19 March 2010, the Court granted an interim injunction stopping work on the deep sea tailings placement system, though not in terms as broad as sought by the Plaintiffs. The order required the Appellants and their associates, agents and employees and persons for whom they are jointly or severally responsible to cease all preparatory work or construction work on the Ramu Nickel Mine deep seal tailings placement system that involves directly or indirectly damage or disturbance to the offshore environment – including without limiting the generality of the foregoing, all coral blasting or popping of dead or live coral and laying of pipes – and restrained all such work pending determination of the substantive proceedings.
    
81. By Notice of Motion filed on 29 March 2010, the First Appellant applied for a declaration that proposed work of fabricating a pipeline, which involved welding to be carried out from the land and floating of the assembled parts (and ballast) on the sea, did not constitute a breach of the interim injunction. The Application was opposed by the Respondents. On 2 April, 2010, the Court made the declaration sought by the First Appellant; this did not involve any variation to the existing interim injunction.
    
82. On 24 March 2010, the First and Second Appellants (supported by the other Appellants) then brought an application to set aside the interlocutory injunction on the basis that the National Court had mistakenly interpreted and applied the law and/or on the basis of new material that was not reasonably available at the time of the first hearing. The National Court on 12 April 2010 considered the application and reserved its ruling.
    
83. On 14 April 2010, the National Court (Cannings J) delivered its decision and refused the order sought to discharge the interlocutory injunction granted on 19 March 2010.
    

Grounds of Appeal

84. The grounds raised in support of the appeal against the decision of 19 March 2010 and 14 April 2010 are restated below:
    

" 3. Grounds

His Honour erred in that he should have found that the Respondents had not established a prima facie cause of action or a seriously arguable case of either private or public nuisance actual or threatened.

His Honour erred in that he should have found that the First Appellant had an Approval under the Environmental Planning Act Ch. No. 370 which by virtue of the transitional and savings provisions was deemed a Permit under the Environment Act 2000 permitting it inter alia to construct and operate a deep sea tailings placement system as part of the Ramu Nickel Mine Project.

His Honour misconstrued section 136(3) of the Environment Act 2000 in that he should have found that that provision only applies to an activity that is an offence under the Act and nothing the First Appellant was doing or intended to do was such an offence.

His Honour erred in that he should have found that the Respondents had not established they had sufficient stand.

His Honour erred in failing to find that having regard to the stage of construction of the Ramu Nickel Mine Project, the First Appellant's plan to install the deep sea tailings placement system in march 2010, the scheduled completion of the project in 2010 after years of construction, the timing of the Respondents' application, the fact that some of the affidavits relied on by the Respondents had been sworn in 2009 and only filed and served in March 2010, that the balance of convenience favoured refusing an interlocutory injunction.

His Honour erred in that he should have refused the interlocutory injunction on the grounds of the Respondents' delay.

His Honour erred in that he should have refused the interlocutory injunction on the grounds that not all Respondents had provided undertakings as to damages; the undertakings which were provided could not possibly compensate the First Appellant and the Fifth Appellant for the enormous loss they would suffer in consequence of the granting of the injunction, and that accordingly it was unjust to grant the injunction.

and as to the judgment of 14 April 2010. His Honour failed in law and in fact to exercise his discretion judiciously in that –

His Honour should have found that the interlocutory injunction granted on 19 March 2010 had been granted on an erroneous legal basis including a misinterpretation of the meaning and application of section 136(3) of the Environment Act 2000.

His Honour should have found that the interlocutory injunction had been granted on an erroneous factual basis in that the First Appellant had a Permit or Permits under the Environment Act 2000 allowing the activities it was carrying out or intending to carry out in respect of the construction and operation of a deep sea tailing placement system.

The Appellants repeat each of the above grounds relied on in support of the appeal against the granting of the interlocutory injunction on 19 March 2010."

Law

85. There is no dispute between the parties as to the relevant applicable legal principles relating to an appellate Court overturning a trial judge's exercise of judicial discretion in an interlocutory judgment.
    
86. The principles upon which an appellate court should overturn a discretionary judgment are well established in this jurisdiction. In The Government of Papua New guinea and Richard Harold Davis v Stanley Barker [1977] PNGLR 386, a full bench of the Supreme Court comprising of the then Frost CJ, Prentice DCJ and Kearney J discussed the applicable principles at p.397:
    

"This being an appeal against the exercise of discretion, it must I think, be shown to this Court that the Judge in Chamber exercised his discretion upon a wrong principle, has allowed extraneous or irrelevant matters to guide or affect him, mistaken the facts or not taken into account some matters for consideration. Then and only then (Lowell v Lowell (150) 81 C.LR.513, at p.518. House v The King (1936) 56 C.L.R 499 at p.504, the Lower Court having been shown to be clearly wrong in its decision (Australian Coal and State Employee's Federation v The Commonwealth and Others [1953] HCA 25; (1953) 94 C.L.R. 621, or it appearing that otherwise injustice will be done (Evans v Bartlam [1937] A.C. 473 at p.480, the appellate Court may exercise its own discretion in substitution for that of the lower court, if it has the material to do so".

87. This decision was subsequently followed and applied in Stettin Bay Lumber Company Ltd v Arya Ship Management Ltd (1995) SC 488. There the Court said at p.1:-
    

"The appeal... is an appeal against the exercise of discretion and for the Appellate Court to substitute its discretion for that of the Judge appealed from, it must be shown that the Judge appealed from exercised his discretion upon a wrong principle, allowed him, mistook the facts or did not take into account some matters for consideration"...

88. In 1999, the Supreme Court in Sir Julius Chan v Ombudsman Commission of Papua New Guinea once again considered the issue of the Appellate Court substituting its own discretion over the trial Judge's exercise of discretional jurisdiction. The majority, Sheehan J and Jalina J (as they then were), remarked that in such a situation, an appellate Court should be cautious in reviewing interlocutory decisions of a trial Court. They said at p.254.
    

"Australian decisions show that an appellate court will exercise particular caution in reviewing interlocutory decisions of lower courts particularly those involving exercise of discretion in matters of practice and procedure. A statement often cited is that of Jordan J. In Re the Will of Gilbert (1946)...(NSW) LR 318:

"I am of the opinion that... there is material difference between an exercise of discretion on a point of practice or procedure and or exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference of the orders of Judges of the first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or litigious disposition could, at will, in effect transfer all exercise of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal."

In Gerard v Email [1993] 32 NSWLR 662 at p.668, Kirby ACJ notes that appellant Courts must pause long and hard before disturbing interlocutory orders and especially in matters relating to practice and procedure and costs."

89. The Supreme Court in Chief Collector of Taxes v Bougainville Copper Ltd, and Bougainville Copper Ltd v Chief Collector of Taxes, SC 853 (2007), confirmed those principles.
    

Interlocutory Injunctions

90. The principles upon which a court may grant an interlocutory injunction are well-established, namely, whether there is a serious question to be tried, and discretionary matters such as where the balance of convenience lies and delay, and the provision of an appropriate undertaking as to damages: see, for example, Public Employees Association v Liosi [1988-89] PNGLR 585; Kuluah v University of PNG [1993] PNGLR 494; Ariako v Madang Provincial Government [1995] PNGLR 38; Chief Collector v Bougainville Copper Limited (2007) SC853, paragraph [31].
    

Serious question to be tried

91. The thrust of the Appellants submissions was centered on what the trial Judge said in relation to Section 136 of the Environment Act 2000.
    

Section 136 Environment Act 2000

92. The Appellants submit that the trial Judge erred in fact and in law in both of his decision in holding that there are serious questions to be tried under Section 136 of the Environment Act 2000 and the common law torts of public and private nuisance where the proposed activity of construction and operation of deep sea tailings placement system is authorized by statue under the repealed Environment Planning Act and the Environment Act 2000.
    
93. The Appellants submit, inter alia, that:
    

"The Department of Environment and Conservation approved the Ramu Nickel Environment Plan 1999 now repealed Environment Planning Act. This is conceded by the Respondents. The approved terms and conditions included permission for the construction and operation of a deep sea tailings placement system (DSTP).

There was evidence that the Environmental Plan Approval was granted under the repealed Environmental Planning Act. Before that approval was granted the Environmental plan was independently reviewed by Dames and Moore.

Subsequently, many aspects of the Environmental plan have been independently reviewed by the following experts:

Dames and Moor Report to DEC states:

"(4) REVIEW OF DSTP DESIGN

We concur in the main features of the DSTP system as proposed, specifically the proposal for de-accretion and the outfall depth. of 150 m. Our own experience would lead us to some differences in design. However, we should emphasize that we do not see any "fatal flaws" in the design proposed.

(6) REVIEW OF PREDICTED IMPACTS

We agree with NSR that only impacts to the shallow environment will be localized direct disturbance and short term during installation of the pipelines. Recovery should be repel and total.

(9) SUMMARY AND CONCLUSION

Overall, we consider that the proposed tailings system is appropriate to the situation and, in all possibility, represents the lowest environmental impact and lowest risk to life and property. There is potential, in my view for further optimization of the DSTP system during detailed design."

During 2000 and 2001, CSIRO of Australia conducted a 12 month Oceanographic study at Basamuk which concluded that:

"The southward flow does not necessarily imply upwelling at that time because the flow could have deviated east or west near the coast."

In the HAYCO Report titled Ramu Nickel Deep Sea Tailings Placement System Basic Design stated at clause 3.12 that:

"The goal of deep sea tailings systems is to move the tailings from the end of the outfall to the deep sea oceans basins with minimal deposition in shallow water near the out fall. It has been observed at various out fall sites those tailings which are sufficiently fine form a density current which flows along the seabed."

94. A report prepared by Cardino Acil who were engaged by the DEC to..." advise the Director of Environment (PNG) on the integrity of the DSTP design and related risks with the relevant management options identified" said that;
    

"There are no matters identified in the documents provided which appear to be of sufficiently serious nature as to prevent the project proceeding."

95. The principal claim by the Respondents is that the First appellants proposed activity, namely, the construction and operation of deep sea tailings disposal is not authorized by law as it would cause environmental harm. The Respondents claim

that under the Environment Act 2000, "If there is anything going on that would be considered unlawful under the current Act, it is only saved if the activity was actually being conducted at the time of coming into operation of the Act and that was 1 January 2004 and nothing was going on then..."

96. Both in the National Court and before this Court, the Appellants submit that the approval of the Environmental Plan 1999 is saved under Section 13 5(1) of the Environment (Permits and Transitional) Regulation. According to those provisions, the Approval granted under the now repealed Act in force immediately before the coming into operation of the new Act continued to have full force and effect and were "deemed to be corresponding permits for the purposes of the Environment Act 2000 and could be dealt with in accordance with the provisions of this Act as if they had been issued under this Act."
    
97. The Appellants further submit that S.13 6(1) is the principal saving provision whereby approval is granted under the repealed Acts are continued and are deemed to be corresponding Permits under the new Act. They submit that the trial Judges decisions in the Court below were based upon a misreading of Section 136(3). They submit that Section 136(3) deals with a situation where a permit granted under the repealed Act authorizes a certain activity but under the new Act that same activity is an offence.
    
98. The Appellants submit that S 136(3) is intended to deal with the situation where a person, at the time the new Act came into force, was conducting an activity under an approval granted under the old Act and the activity would constitute an offence under the new Act. However, S 136(3) is irrelevant as the proposed activity, namely the construction and operation of the DSTP system which was approved under the old Act is not an offence under the new Act.
    
99. The Appellants submit that Section 136(3) is irrelevant and has no application as none of the activities including deep sea tailings disposal placement system approved under the Environmental Plan 1999 is an offence. Thus, it was submitted the learned trial judge erred in law and in fact in his reasoning when he said..." There are serious issues to be tried, particularly concerning whether the environmental approval for deep sea tailings placement is lawful."
    
100. The Appellants further submit that pursuant to S.65 (1) of the Environment Act 2000, the Director may grant a Permit if he is satisfied of the matters stated for the application. Upon the issue of the Permit, the Director shall specify the conditions under which the permit is granted having regard to some matters as the object of the Act, matters of National importance, general environmental duty, relevant environmental policy etc. Section 71 of the Environment Act 2000 empowers the Director to issue a Permit where he is satisfied of the matters set out in Section 65 (1). A permit includes an Approval granted under the repealed Act.
     

Permit under the Environment Act 2000

101. Even assuming that the Approval granted under the repealed legislation was not saved in respect of deep sea tailings placement activities (which of course is disputed), the First Appellant nonetheless has separate and specific authorization under the Environment Act 2000. The First Appellant was granted a Permit pursuant to sections 65 and 66 of the Environment Act 2000.
     
102. There have been other applications by the First Appellant under the

Environment Act 2000, and the Director has granted a number of permits and amendments to the existing permit as the project progressed. Those permits and amendments are as follows:-

23 October 2006,

7 November 2007, and

10 August 2009,

103. The Permit issued by the Director on 23 October 2006 specifically, in Condition 5, provided that "the Permit Holder shall not commence work on the DSTP until this permit is amended accordingly to authorize the construction work on the mine tailings disposal to commence".
     
104. By letter dated 3 May 2007, the First Appellant submitted another application to amend the Permit. The application was accompanied by other supporting documents in respect of the Ramu Nickel deep sea tailings placement system.
     
105. As a result of the application of 3 May 2007, a Permit was issued to the First Appellant dated 7 November 2007 which specially authorizes the construction of a deep sea tailings system.
     
106. There was another amendment granted dated 10 August 2009 but it does not concern the deep sea tailings placement system.
     
107. By letter dated 7 January, 2010, the First Appellant informed the Department of Environment and Conservation of what it is proposing to do with respect to the laying of the pipeline for the DSTP system. The Department has responded appropriately by letter dated 11 March 2010. Accordingly, there was evidence that the First Appellant was working in close consultation with the department.
     

Common law torts of public and private nuisance

108. The First Appellant submits that His Honour erred in law and fact in his reasons of 19 April 2010 in relation to "the principle that statutory approval of a nuisance-generating activity is only a defence to a nuisance claim if the nuisance is an inevitable consequence" of that activity that has been authorized by statute.
     
109. It is a defence to a claim for public or private nuisance if a defendant is acting under a statutory authority. Street on Torts, Sixth Edition, pages 94 – 95 under the heading "Defences to Intentional Torts to the person and property" – Statutory Authority says:
     

"Public bodies and officials may only do acts which would be lawful in others if they are authorized to do them by statute. Of course, as government has become increasingly regulatory and far – reaching in its effects, more and more such powers have been given. The question before the courts in tort cases of this type is whether the Act in question authorized the official to commit the tort complained of.

Certain guiding principles have been worked out by the courts in order to answer this question. Either duty or a power to do the act will afford a defence. The defendant must prove that the tort would be an inevitable result of performing the act authorized: if, for instance, a local authority built an efficient electricity generating station, the fumes from the damaged crops of the plaintiff, they would only have a defence if they proved not merely that an efficient station had been built, but also that they had used all reasonable care in the light of current technical and scientific skills to prevent the commission of a tort; however, they have an absolute defence, regardless of proving these precautions, if they can discharge the very heavy burden of proving that the Act authorized them to disregard these matters."

110. The First Appellant was granted all necessary statutory Approvals under the Environmental Planning Act.
     
111. The granting of those approvals and subsequent permits and approvals was supported by many independent scientific studies.
     

Section 7 of the Environment Act 2000

112. The Appellants submit s.7 of the Act is relevant. It reads:
     

"7. General environment duty

A person shall not carry out an activity that causes or is likely to cause an environmental harm unless the person takes all reasonable and practicable measures to prevent or minimize the environmental harm.

...................;

Failure to comply with the general environmental duty does not constitute an offence or given raise of itself to a right to civil remedy, but compliance with the duty may be enforced by –

an Environment Protection Order; or

a Clean-up Order; or

an Emergency Direction.

Where in a proceeding it is alleged that a person failed to comply with the general environmental duty by causing environmental harm, it will be a defence if the harm is caused in the course of comply with an Environmental Code of Practice or authorized to be caused under –

an Environment Policy; or

a condition of an environment permit; or

an approved environmental plan; or

an Environment Protection Order; or

an Emergency Authorization."

113. This section confirms and gives statutory effect to the principle that an action does not lie in public or private nuisance for conduct that has been authorized under statute.
     
114. The First Appellant further submits that Section 129 of the Environment Act 2000 provides for compensation to be paid to any person including the State who suffers injury or damage as a result of an offence under the Act. Although there is no PNG case on point on this issue, in Marriage v East Norfolk Rivers Catchment Board [1949] 2 ALL ER 1021, the Court held:
     

"(1) where a statue empowering the execution of a variety of works gave to the statutory authority wide powers, which necessarily involved the possibility of interference with the rights of others, and expressly provided a remedy by way of compensation, a person who sustained injury through the carry out of operations authorized by the statute had no right of action for nuisance; and therefore, as the injury sustained by the plaintiff was occasioned by a normal drainage operation, carried out in the usual way, under the powers given to the catchments board by s.34 (1) of the Land Drainage Act, 1930, the plaintiff's only remedy for the injury of which he complained of was to claim compensation under s.34 (3) of the Act."

115. Based on the Marriage v. East Norfolk Rivers case (supra), the First Appellant submits that Section 129 of the Environment Act 2000, provides for statutory compensation if an office for which a person is convicted has caused damage or injury to a person who has suffered loss or damage by reasons of the offence.
     
116. The First Appellant submits that it was granted statutory approval to construct and operate a deep sea tailings system at Basamuk pursuant to the repealed Environmental Planning Act which is deemed to be a permit under section 136(1) of the Environment Act 2000 and section 28 of Environment (Permits and Transitional) Regulation 2002.
     
117. The Respondents alleges that:-
     

"a) The Respondents allege the first Appellant is about to commit gross private and Public nuisances in the Basamuk and Astrolabe Bays and such activity are unlawful.

(b) The Respondents allege based on scientific evidence contained in the affidavits that the activity of dumping waste into the Basamuk and Astrolabe Bays by the First Appellant in reliance on the Ramu Nickel Environmental Plan 1999 Approval or anything else, will and/or will potentially cause (relying on the Lutheran report/Affidavit of Dr Amanda Reinhelt-Brushett/Affidavit of Dr Greg Brunskill):-

Ore slurry deposits and turbidity in shallow habitats

Condition suitable to Tsunamis

Biological and spatial interference on shallow water and deep water fishes and fauna

Shallow water habitat change and burial of fauna

Toxic effects from tailings

Tailings brought onshore from upwelling and currents

Turbidity Plumes of sediment, both toxic and otherwise, spreading out horizontally over hundreds of kilometers.

Adverse biological impacts on the Goldband Snapper and the Ruby Snapper.

Morality of Benthic Fauna over a large area.

Increased bioconcentration of trace metals and eco-toxicological risks to the food web.

Destruction to essential services being the new Telikom cables.

Irreversible damage to Corals, including but not limited to their breeding cycles.

Elevated levels of chromium, iron, manganese, nickel and mercury in the marine environment as well as extreme high levels of ammonia which; will be ingested by benthic fauna (bottom of the food chain),may/will be acutely and chronically toxic to fish, crustaceans and cephalopods,will create sub-lethal affects as well, including reduced growth and gill damage.

(c) The Respondents seek as a result of this nuisance a permanent anticipatory injunction, and the respondents say that the First Appellant cannot rely upon the defence of statutory authority as although the First Appellant has an Environmental permit, such permit does not authorize the nuisance, as the permit was granted on the basis of the miner's assertion that there would be no environmental harm.

73. The Respondents submit that:-

The disposal of waste by the First Appellant into Basamuk and Astrolabe Bays and consequently the Ramu Nickel Environmental Plan 1999 Approval is contrary to Goal 4 of the National Goals and Directive principles of the Constitution and the scheme and spirit of the Environmental Act 2000 which is an act to give effect to the Fourth National Goal and Directive Principle of the Constitution, in that it does not promote sustainable development of the environment and the economic, social and physical well-being of people by safeguarding the life-supporting capacity of air, water, soil and eco-systems for present and future generations, and does not avoid or mitigate any adverse effects of the activity on the environment.

This activity of disposing tailings and waster into Basamuk and Astrolabe Bays by the First Appellant and will adversely affect matters of national importance within the meaning of Section 5 of the Environmental Act 2000, being that these activities will adversely effect:-

The preservation of Papua New uinea traditional social structures; and

The maintenance of sources of clean water and subsistence food sources to enable those Papua New Guineans who depend upon them to maintain their traditional lifestyles; and

The protection of areas of significant biological diversity and the habitats of rare, unique or endangered species; and

The recognition of the role of land-owners in decision-making about the development of the resources on their land; and Responsible and sustainable economic development.

The uncontested Lutheran Church commissioned independent report predicts that this disposal of waste by the First Appellant into Basamuk and Astrolabe Bays and consequently the Ramu Nickel Environmental Plan 1999 approval does not protect the environment from harm and is likely to cause Environmental and or serious environmental harm, and consequently this disposal is unlawful and contrary to ss7, 10 and 11 of the Environment Act 2000.

This disposal of waste by the First Appellant into Basamuk and Astrolabe Bays and consequently the Ramu Nickel Environmental Plan 1999 Approval will adversely affect the beneficial value of the environment within the meaning of the Environment Act 2000 and will be detrimental to ecological health, public benefit, welfare, safety, health and aesthetic enjoyment and which requires protection from environmental harm.

This disposal of waste by the First Appellant into Basamuk and Astrolabe Bays and consequently the Ramu Nickel Environmental Plan 1999 Approval is not the best practice environmental management for this activity.

Further, and/or in the alternative, whilst the Ramu Nickel Environmental Plan 1999 Approval was initially saved by the transitional provisions of section 136 of the Environmental Act 2000, it is the Respondents' submission that the First appellant's proposed dumping and the consequential the environmental harm caused by the activity being the disposal of waster into Basamuk and Astrolabe Bays is unlawful and not saved and allowed as immediately before the coming into the operation of the environmental act 2000, the first Appellant was not lawfully carrying on the activity pursuant to an approval under the repealed Acts.

As the activity was not being carried on by the First Appellant or anyone else under Ramu Nickel Environmental Plan 1999 Approval at the commencement of the Environmental Act 2000, the Activity must be subject to the Environmental Act 2000, and would not be lawful under that Act and out to be restrained.

His Honour considered in his decision on 19 March 1020 over 2 pages that the Respondents had arguable case. His Honour considered in his decision on 14 April 2010 over three pages of judgment the submissions by all parties and then found arguable case. There is an abundance of evidence that environmental damage/nuisance will be caused – so the trial judge found arguable case as whilst there may be a permit the question is whether the nuisance caused is the "inevitable consequence of the activity".

The appellants have NOT even appealed this basis for arguable case. All they have said that the trial judge failed to find that their permit authorized them to construct the system. This is not true – the judge recognized that they have an approval but the question for the action is whether the harm is authorized.

There is nothing in the Appellants arguments that disturb that view.

The Respondents have an arguable case for nuisance and for declaratory orders involving the construction of instruments made under the Environment Act 2000 and for breaches of that Act. There are no merits in these grounds and they ought to be dismissed.

The Respondents submit the Court should refer to 2 separate but important pieces of Legislation in consideration whether there are serious issues to be tried.

Environmental Act 2000

The Environmental Act 2000 is the Act which gives effect to NGDP 4 of the Constitution and also the Act which is to protect the environment from harm. We draw your attention to section 4 of the Act which sets out its objects.

Justice will be done if a decision is made by this Court that reflects the objects of this Act and not the objective of development at whatever cost.

Section 25 of the Constitution places an obligation on all governmental bodies, including the court, to give effect to the National Goals and Directive Principles, and the relevant NGDP here is Goal 4.

"Natural resources and environment.

We declare our fourth goal to be for Papua New Guinea's natural resources and environment to be conserved and used for the collective benefit of us all, and be replenished for the benefit of future generations.

WE ACCORDINGLY CALL FOR –

wise use to be made of our natural resources and the environment in and on the land or seabed, in the sea, under the land, and in the air, in the interests of our development and in trust for future generations; and the conservation and the replenishment, for the benefit of ourselves and posterity, of the environment and its sacred, scenic, and historical qualities; and all necessary steps to be taken to give adequate protection to our valued birds, animals, fish, insects, plants and trees."

Section 25(3) obliges a decision maker, whatever the source of his power to give effect to the NGDP, so long as that is what parliament intended.

Parliament clearly intended for the environment to be protected from harm and for those decision makers to take a pre-cautionary approach. We refer you to a passage taken from the Constitutional Planning Committee's report in 1975, that was also referred to His Honour.

It is in the interests of justice to leave the injunction in place until the substantive hearing to give effect to NGDP4."

118. In my view, the submissions raised by the Respondents demonstrate that there are serious issues to be tried. One of the key issues is whether the environmental harm that is likely to occur once the pipe line is constructed and the tailings are discharged, is authorized. The respondents submit that the environmental harm that is like to occur has not been authorized.
     
119. The appellants have conceded during oral submission that some harm will be done to reef; some fish will be killed during the construction phase of the tailings pipeline.
     
120. The interpretation of Section 136 of the Environment Act 2000 is only one aspect in determining whether there are serious issues to be tried. It is certainly not the only relevant provision to determine this issue.
     
121. There are other important issues raised by this proceeding that gives rise to my mind that indeed there are serious issues to tried. One of these is the consideration and or application of the provisions of the National Goals and Directive Principles as set out in the Constitution of Papua New Guinea. In particular, the Respondent has raised National Goals and Directive Principles 4 of the Constitution.
     
122. The Appellants have not made any submissions on this point. I consider it relevant in the present because in view, this particular directive principle is squarely on point in relation to the issues before the Court below.
     
123. Another matter that is relevant is the applicability of the common law principles relating to the issue of a statutory defence relating to claims based on public and private nuisance. Whilst it was raised by both parties before us, the submission did not address the issue as to the adoption and applicability of those principles in Papua New Guinea. This raises another Constitutional provision, namely Schedule 2.2 of the Constitution. It reads:-
     

"Sch.2.2.2 – Adoption of a common law

3. Subject to this Part, the principles and rules that formed, immediately before Independence Day, the principles and rules of common law and equity in England are adopted, and shall be applied and enforced, as part of the underlying law, except if, and to the extent that –
   
   1. they are inconsistent with a Constitutional Law or a statute; or
      
   2. they are inapplicable or inappropriate to the circumstances of the country from time to time;
      
   100. or in their application to any particular matter they are consistent with custom as adopted by Part 1.
        
4. In relation to any particular question before a court, the operation of Subsection (1)(b) shall be determined by reference, among other things, to the circumstances of the case, including the time and place of any relevant transaction, act or event."
   
124. In view of the above provisions and the provisions of the Environment Act, the issue is whether the common law principles relating to the statutory defence is or are appropriate and applicable to the circumstances of this case in particular and circumstances of PNG in general. This in my view raises serious issues.
     
125. In my opinion the allegations raised by the Respondents against the Appellants raises serious issues as to facts and the law. They say that serious harm may be done to their environment and their livelihood would be affected by construction of the tailings pipeline and subsequent discharge of tailings into the sea. In my view these are not speculative. These are real issues and the court should not brush aside the concerns of the landowners on a narrow basis.
     
126. This Court is not only a Court of law; it is also a Court of equity. The Court must not shirk from its responsibility to do justice given the circumstances of this case and this country.
     
127. Arguments were put forward from all parties from both sides on both occasions, relating to other discretionary matters with particular attention to:-
     

preservation of status quo,

prejudice,

delay,

the interest of the respondents (standing),

conduct of the parties; and

whether damages would be an adequate remedy and whether an undertaking as to damages was given.

128. I accept the submission advance by the respondents. A careful reading of His Honour's judgment on these aspects shows that His Honour was conscious of and carefully considered the various factors, such as preservation of the status quo, prejudice, delay, the standing of the respondents, conduct of the parties and whether damage would be adequate remedy and whether am undertaking as to damage were given.
     
129. Whilst I note the submissions made by the Appellants, I am mindful that if the DSTP is allowed to proceed, the potential environmental harm, far outweighs the lifting of the injunction. The balance of convenience lies in maintaining the status quo at least until after the trial of the substantive matter. It is better to take a precautionary approach than to proceed in haste.
     
130. In relation to the other discretionary matters such as standing, delay etc., I am of the view that these were matters, properly within the powers of the trial judge to make in the exercising of his discretion. In the circumstances, I would not disturb his ruling on these aspects.
     
131. For the reasons I have given, I would dismiss the appeal and confirm the decisions of the learned trial judge.
     
132. Finally, I would encourage the parties to liaise with the trial judge to have the substantive matter brought on for trial as soon as possible.
     

Formal Orders

1. The appeal is dismissed
   
2. The National Courts Orders of 19th March, 2010 and 14th April, 2010 are confirmed.
   
3. The appellants shall pay the respondents cost of the appeal to be taxed if not agreed.
   

____________________________________

Posman Kua Aisi Lawyers: Lawyers for the First Appellant
Allens Arthur Robinson: Lawyers for the Second Appellant
Solicitor-General: Lawyer for the Third, Fourth and Fifth Respondents
Nonggorr William Lawyers: Lawyers for the Respondents