Papua New Guinea Law Reports - 1990
[1990] PNGLR 222
SC384
PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]
SCR NO 3 OF 1989 RE FORESTRY (PRIVATE DEALINGS) ACT (CH NO 217) SPECIAL REFERENCE PURSUANT TO THE CONSTITUTION SECTION 19 REFERENCE BY THE LAPAN ASSEMBLY OF THE MANUS PROVINCIAL GOVERNMENT
Waigani
Kapi DCJ Los Hinchliffe JJ
26 February 1990
6 June 1990
STATUTES - Validity - Forestry (Private Dealings) Act - Statute regulating sale of timber by statutory owners - Appointment of agents - Power of agent to dispose of property rights - Whether powers in breach of protection for unjust deprivation of property - Constitution, s 53 - Forestry (Private Dealings) Act (Ch No 217), s 7.
CONSTITUTIONAL LAW - Special rights - Protection from unjust deprivation of property - Whether applicable to statutory rights regulating sale of customary timber - No compulsory acquisition - Constitution, s 53 -Forestry (Private Dealings) Act (Ch No 217), s 7.
The Constitution, s 53, precludes the compulsory taking or possession of any property, interest in or right over property except in accordance with an Organic Law or an Act or Parliament.
The Forestry (Private Dealings) Act (Ch No 217) regulates the sale of timber of customary owners and, inter alia, provides for the manner in which customary owners may be ascertained and the appointment of agents to represent the interests of customary owners in, for example, acquiring and selling rights to timber.
Held
The provisions of the Forestry (Private Dealings) Act (Ch No 217) are validly enacted: they do not offend the provisions of s 53 of the Constitution because they do not deal with compulsory acquisition or possession of any property.
Cases Cited
Ready Mixed Concrete Pty Ltd v The Independent State of Papua New Guinea [1981] PNGLR 396.
Supreme Court Reference
This was a special reference to the Supreme Court pursuant to s 19 of the Constitution. The question referred is set out below.
Counsel
R Taylor, for the referror.
J Baker, for the negative case.
S Sitapai, by leave, for the intervenor.
Cur adv vult
6 June 1990
KAPI DCJ LOS HINCHLIFFE JJ: This is a reference pursuant to s 19 of the Constitution. The following questions have been referred for consideration:
1.       Paragraph (a) of s 7(5) of the Forestry (Private Dealings) Act (Ch No 217) allows for the appointment of an agent who has power to execute certain instruments, and do all other things necessary or convenient, for effecting the sale or disposal of property rights on behalf of the owners of those rights. Is this provision invalid for the reason that it breaches s 53 of the Constitution in that it empowers the agent to so act without having obtained authorisation from the owners on whose behalf he acts?
2.       Section 7(6) of the Forestry (Private Dealings) Act (Ch No 217) provides that certain instruments executed, or acts, matter or things done, by an agent appointed under s 7(5) of the Act in relation to the sale or disposal of property rights are as valid and effectual as if done by all the owners of the rights. Is this provision invalid for the reason that it breaches s 53 of the Constitution in that property rights may be acquired from owners by operation of the provision where:
(a)      owners have had an agent act on their behalf without the agent having obtained any authority from the owners to so act and/or
(b)      some owners are neither a party to the sale or disposal nor have had an agent act on their behalf in effecting the sale or disposal?
The Forestry (Private Dealings) Act (Ch No 217) regulates the sale of timber by customary owners. The scheme may be described in brief as follows. Where timber is purported to be sold in an area, the Minister for Forest, on application by any interested person, declares the area to be a Local Forest Area for the purpose of the Act. The owners by custom of any timber in the declared Local Forest Area may sell or dispose of that timber to any person. The sale of timber is to be done by way of an agreement which also stipulates other matters. Such an agreement is of no effect until it is assented to by the Minister. The Act also sets out the manner in which the owners of the timber are to be ascertained. Under s 7 of the Act the Minister may by notice in the National Gazette declare a body to be a prescribed authority whose purpose is to investigate and to ascertain the ownership of the timber and appoint an agent to represent the interests of the owners of the timber.
The questions referred are based on a premise which is questionable. It is assumed that an agent appointed under the Act is free to act without having first obtained authorisation from the owners. In our view this is an erroneous assumption. Section 7 of the Forestry (Private Dealings) Act ensures that the ownership of the timber is ascertained. Under s 7(5) of the Act, an agent may be appointed to represent the owners of the timber for the purposes set out under the Act. Such an agent can only act “on behalf of the owners of out timber, or of persons entitled to any compensation or other payment” and receive such money, rent, royalty, compensation or other money or thing and “distribute it to the persons entitled”. He cannot act without the authority of and against the owners of the timber. Such an act would be unlawful. It was suggested in argument that an agent could act against the interests of the owners of the timber by virtue of s 7(5) and s 7(6) of the Act. That is to say, he could deliberately act against the instruction or interests of the owners or deliberately exclude any person or groups of persons in an agreement for sale of timber. In our view, this is an erroneous interpretation of those provisions and it is a construction against the interest of the owners of the timber. We do not think that it was the intention of the Parliament to enable an agent to dispossess owners of timber in this way. This is a view held conveniently to bring in the constitutional argument under s 53 of the Constitution. We will refer to this provision later on in our judgment. The purpose of appointment of an agent under s 7 is not so that he may be able to act against the interests of the owners of the timber but so that he may represent and protect the interests of the owners. In custom there is usually more than one person who owns the timber. In some instances, there may be many groups of people who may claim ownership of the timber. It would be difficult to enter into agreements and do all such other necessary acts with companies or other persons who may want to explore the timber resources. An agent is appointed to act on behalf of the owners of the timber for the purposes of matters set out under s 7(5)(a)-(c) for convenience and such acts are valid and effectual “as if executed or done by all the owners of the timber or rights” under s 7(6). Any agent who acts outside any authorisation by the owners of the timber is acting unlawfully and may be liable to be sued by the owners. Under s 7(3) and s 7(4), the State and a prescribed authority are protected from any civil proceedings but there is no such protection for the agent.
It follows from our reasoning that the provisions of the Forestry (Private Dealings) Act do not deal with compulsory acquisition or possession of any property. Section 53 of the Constitution has no relevance and application to this Act. There are three main components to s 53:
1.       It deals with compulsory acquisition of property, interest in or right over property in accordance with an Organic Law or an Act of Parliament.
2.       Such acquisition must comply with s 53(a) and (b).
3.       Just compensation must be made on just terms by the expropriating authority.
As to the first matter, Miles J in Ready Mixed Concrete Pty Ltd v The Independent State of Papua New Guinea [1981] PNGLR 396 at 409, said:
“The key word is ‘compulsorily’ which I think implies the exercise of some power conferred by statute on the State or an instrumentality of the State.”
As we have stated, the Forestry (Private Dealings) Act does not deal with compulsory acquisition of any property, interest in or right over property. It simply provides for a procedure by which the customary owners of timber may be able to deal with other persons for the purposes of selling the timber. This is a private matter and they may choose to enter into an agreement to sell timber.
As to the second matter, it could not be argued that the Forestry (Private Dealings) Act authorises compulsory acquisition which is required for either a public purpose or for a reason that is reasonably justifiable in a democratic society that has a proper regard for the rights and dignity of mankind.
As to the third matter, it is even quite inappropriate to consider that an agent appointed under the Forestry (Private Dealings) Act is an expropriating authority for the purposes of just compensation.
We would answer both questions (as amended) in the negative and remedies for those owners whose authorisations have not been obtained by the agent or whose interests were not represented at the sale or disposal of the timber rights would have their remedy in other civil proceedings against the agent provided by law.
Questions answered “No”
Lawyer for the affirmative case: Rodney Taylor.
Lawyer for the negative case: Principal Legal Advisor.
Lawyers for the intervenor: Karingu Sitapai Kemaken & Associates.