Collins v ARB y

Collins v ARB y - [1941] HCA 37 - HCA 1941 case summary — Zoe

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Rk. D. Bertie, solicitor for the appellants, submitted, pursuant to the Appeal Ordinance 1909, sec. 9, an argument in writing of which the following is a summary : - 1. For the purposes of resumption the native owners must be considered to be the owners in fee simple with an ample right of alienation and receive compensa- tion accordingly. The protectorate of New Guinea was constituted a possession by Order-in-Council of 8th June 1888 made under the British Settlements Act. By art. xxx1. of the Instructions and Sign Manual and Signet to the Administrator of British New Guinea of the same date the Administrator is instructed specially to take care to protect the natives in their persons and the free enjoyment of their land and other possessions. This instruction has been implemented in the Ordinances. By Ordinance No. 2 dealings in land with or by natives were prohibited, but it was provided that the Administrator might purchase or lease the land. 'The principle of this Ordinance has been continued : See, for the present law, Land Ordinance 1911-1935, secs. 3-9 and Second Schedule. The original Letters Patent and the Instructions issued thereunder have statutory authority; the Administrator is bound by statute to protect the natives in the free enjoyment of their land. The Possession was acquired not by cession or conquest but by settlement, and the common law alone was brought into the country. Save for the Ordinance preventing alienation the natives could freely alienate their land. They hold the land free of all services, save fealty, and this is an estate of freehold. Reg. 1 of the Second Schedule of the Land Ordinance 1911-1935 recognizes that the native owners can convey an estate in fee simple. The prohibi- tion against alienation is applied for the benefit of the natives alone and cannot be used to decrease the value of the land. The Crown is the only buyer in the first instance, and it is a reasonable assump- tion that the Crown as a buyer would always pay the fair market price. The consideration of the position of the appellants as joint owners under the Crown is quite a different problem from that of their rights inter se. 2. The whole work of making the aerodrome was one work, The runways were obviously part of the land, and

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improvements were effected for the more convenient use of the land as an aerodrome and were part of the land (Reid v. Smith (1) ). The natives are not at present capable of doing anything for their land beyond using it for gardens, but the state of mental or economic development of the owners does not affect the value of the land on resumption. When the court has to decide the value of the land to the vendor it does not take into account any accidental limitations on the vendor. 3. The increased value of the land because of its potentiality as an aerodrome should be considered (Vyricherla Narayana Gajupatiraju v. Revenue Divisional Officer Vizagapatam (2) ). The economic state of the appellants is irrelevant. An able and willing vendor presupposes a vendor in full possession of his faculties and able to put the land to its most profitable use and also able to refuse to sell if the price offered by the hypothetical buyer is not high enough. 4. In valuing the land recent purchases of land in the vicinity by the Government from native owners should be considered. 5. Cases such as Corrie v. MacDermott (3) are dis- tinguishable because in those cases there was a restriction on the tight of alienation and also of user. Here the natives, though they could not sell, had the full right of user and could, in theory, extract from the land whatever profit or value was there and the value of the land to them was its full market value. 6. The land should be valued as at January 1940. The provision of the special Ordinance that the amount of the compensation and the persons entitled should be determined as nearly as possible in the manner prescribed under the Lands Acquisition Ordinance 1914, refers only to secs. 37 to 39 of the Lands Acquisition Ordinance: sec. 29 does not apply. 7. There is no reason why the English practice of allowing ten per cent for compulsory purchase should not apply in Papua. Higgins J. in Spencer v. The Commonwealth (4) disallowed a claim for ten per cent, but nevertheless seems to have added about ten per cent to his valuation.

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provisions of the Land Ordinance 1911-1935 restricts the right of the appellants to sell or otherwise deal with the land and must therefore affect its value. The only purchaser is the Crown. The restriction on disposition must be taken into account as a factor, as the natives could not sell. The value of the land depends on the terms on which it is held by the owners (Corrie v. MacDermott (1) ; MacDermott v. Corrie (2) ). The potentiality of the land for use as an aerodrome might be taken into account in valuing the land, but in determining the compensation it should not be the price that would be paid by a "driven" purchaser to an unwilling vendor. Although the potential value of the land was its value as an aero- drome, the parties should be regarded as being prepared to meet at a figure somewhere between the bare agricultural value and its poten- tial value, namely, what a willing purchaser would pay (Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam (3)). The amount of compensation is fixed at what a willing purchaser would pay, and neither party must be considered to be driven into the bargain. The answer to question 5 (a) is the same. As to 5 (b), the only basis of bringing the buildings into consideration was that they became part of the land and were not removable at the end of the lease. Local native custom was that the owner of the materials became the owner of the house; what the owner of the land had in relation to such buildings was the right to insist upon their removal (Secretary of State for Foreign Affairs v. Charles- worth, Pilling & Oo. (4)). The appellants are not entitled to ten per cent or any other amount for compulsory acquisition (In re Wilson and State Electricity Commission of Victoria (5); In re an Arbitration between Bowman and State Rivers and Water Supply Commission (6) ). The value of the land should be assessed accord- ing to the value on Ist January 1939 in accordance with Lands Acquisition Ordinance 1914, sec. 29. The evidence, however, shows that the buildings which were in existence on Ist January 1940 were also in existence on 1st January 1939. Cur. adv. vult.

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At the date of the resumption the leased part of the land had been improved as an aerodrome, but the additional land was still unimproved for this purpose. The Lands (Kila Kila Aerodrome) Acquisition Ordinance 1939 does not specifically authorize a public purpose, but the preamble states that the lands described in the schedules are required immediately for the purposes of or connected with the Kila Kila Aerodrome, and it appears to me that this state- ment is sufficient to bring the case within the Lands Acquisition Ordinance 1914, sec. 29 (6). The correct date of valuation is therefore 1st January 1939. It is true that the Crown was free to acquire other suitable lands of the same dimensions and construct an aero- drome there, but to do so would require considerable outlay, so that the resumed lands had the potentiality that, having been improved to the extent already mentioned, the Crown would be willing to acquire them for their agricultural value plus the value of the expenditure already made rather than to have to purchase other lands at their agricultural value and then have the trouble and expense of improving them to the same extent. Assuming, therefore, that the appellants were willing vendors and the Crown was a willing purchaser the price would be determined having regard to the fact that the vendors would know that the Crown would pay this amount but no more, and the Crown would know that the vendors could reasonably expect this price (In re London County Council and London Street Tramways Co. (1); Melbourne Tramway and Omnibus Co. v. Tramway Board (2)). Similar principles are applied where land used as a church or school is resumed, the com- pensation being fixed by ascertaining what it would cost to acquire an equally convenient site and erect equally convenient buildings there (Halsbury, 2nd ed. vol. 6, p. 45; Oripps on Compensation, 7th ed. (1931), p. 170). In determining the amount, the improve- ments made to the leased land consisting of the runway and the concrete drains would have to be taken into account.

At a glance

Court

Decision date

Before

Source

Judgment (96 paragraphs)

Parties

Cited By (3)