Kalena Timber Company Ltd v Labere [2004] SBCA 10; CA-CAC 012 of 2001 (10 November 2004)

SOLOMON ISLANDS COURT OF APPEAL

FILE NO/S: Civil Appeal No 12 of 2001

PARTIES:

KALENA TIMBER COMPANY LIMITED
(appellant)

V

JOHN LABERE
(respondent)

AGNES VOTAI
(respondent)

CITATION: Kalena Timber Company Ltd v Labere & Anor

DIVISION: Court of Appeal
PROCEEDING: Civil Appeal
ORIGINATING COURT: High Court at Honiara

DELIVERED ON: 10 November 2004
DELIVERED AT: Honiara
HEARING DATE: 3 November 2004

JUDGES: Lord Slynn President and Goldsbrough and Williams JJA

JUDGMENT OF THE COURT

ORDERS: 1. Appeal dismissed
2. Costs in the cause

COUNSEL: G Suri for the appellant
M Brid for the respondents

[1] THE COURT: By writ issued on 15 September 2000 the Plaintiffs as representatives of the Harero Tribe claimed that the Tribe owned in custom the Harero Land in Rendova Island, Western Province. The Plaintiffs alleged that the Defendant Company had in 1989 negotiated timber rights with landowners in Rendova Island to conduct logging operations on land identified as being situated in certain named districts. Harero was not one of such districts. Yet whilst the Plaintiffs were not able to object to the logging operations since they were not included in the 1989 timber rights process the Defendant began logging operations on land which included the Harero Tribe Land.
[2] Accordingly since the Harero Land had been awarded to the Tribe in litigation, and since it was common knowledge that the Tribe owned the Harero land, the Defendant had no right to begin logging operations there. The Plaintiffs claimed orders that the Defendant be restrained from conducting further logging operation on the Harero land, protection of the proceeds of the logging operations by their payment into a bank account and damages for trespass and conversion.
[3] An application was made to the Honourable Justice Kabui for relief in accordance with the claim made in the writ. This was heard ex parte on 22nd September 2000 when the Judge accepted that the Harero Land was not included in Form 2, the Certificate of Customary Ownership under the Forests and Timber Ordinance 1977. He held that the issue was whether or not the Defendant had obtained a valid licence under the provisions of the Forest Resources and Timber Utilisation Act: the issue as to the ownership of the land fell to be decided by the local Court under the Local Court Act and not by the Area Council under the Forest Resources Act.
[4] The Judge referred to the rules applicable to the grant of interim injunctions as set out in Nelson Meke v Solmac Construction Company Limited (Civil Case No 45 of 1982). In summary there had to be a triable issue; in deciding whether the balance of convenience was in favour of granting the injunction the Court should consider:

(a) whether if the Plaintiff was denied an interim injunction but won his case he could be adequately compensated for in damages for his loss;
(b) whether “if the interim injunction issues, carrying, as it would, an undertaking that the Plaintiff will abide by any order for damages the Court may make, will the Defendant thus be adequately compensated for any loss he may suffer” and
(c) all other factors including “preserving intact the state of affairs which existed at the time the Defendant embarked upon the activity complained of in the substantive action”
(d) the relative strength of the parties’ cases on the merits.
But he said the final decision “is largely dependent on the fact of each case.”

[5] He then reviewed the evidence and the arguments placed ex parte before him in these terms:

“Counsel for the Plaintiffs, argued that there was a triable issue before this Court that being whether or not the Defendant was in possession of a valid licence to enter upon Harero Land for the purpose of felling trees etc thereon in view of the fact that Harero Land was not included in Form 2. She argued that that being the case, and taking into account the facts, the balance of convenience was obviously in favour of the Plaintiffs. She pointed out that if I refused to grant the injunctive order asked for, the Plaintiffs would suffer irreparable loss in that the trees would be gone forever and the land would be damaged including pollution of the rivers in the area. In this regard, if I refuse the injunctive order asked for and the Plaintiffs win their case, would the Plaintiffs be adequately compensated for their loss? There is no evidence before me to confirm that monetary compensation would be adequate compensation in the event that I refuse the injunctive order asked for and the Plaintiffs win their case. This evidence is lacking because the Defendant had not been served with the ex parte Summons. Ideally and as a matter of good practice the Defendants should have been served unless this application is an urgent one. However, in view of the compelling evidence that Harero Land had never been intended to be logged and thus clearly excluded from Form 2, any attempt by the Defendant to enter Harero Land and remove trees therein without being in possession of a licence would be total disregard of the wish of the Plaintiffs to conserve their trees and land. No amount of money would replace the forest that is unlawfully removed plus other environmental damage to the land in whatever form the damage may be. I am of the view that if I refuse the injunctive order asked for and the Plaintiffs win their case, they would not be adequately compensated for their loss. On the other hand, the Plaintiffs have not made any undertaking to compensate the Defendant for their loss if I [grant] the injunctive order against the Defendant and it wins its case. There is also the need to maintain the status quo because not to do so may result in the disappearance of the trees still standing and further damage to the land and the rivers in that area of land. Taking all these factors into account and weighing them against each other, I would, in the result, exercise my discretion in favour of the Plaintiffs and grant the injunction sought.”

[6] On 25 September 2000 he ordered that the Defendant be restrained from conducting any further logging activities on the Harero Land and that the proceeds of any logging activities on the Land be paid into Court.
[7] On 3 October 2000 the Defendant applied for an order that the said injunction be set aside. On 16 October Kabui J stayed the ex parte orders of 25 September 2000 pending the hearing of the application of 3 October.
[8] This application was heard by the learned Judge with counsel present for both parties on 12 and 13 February and 21, 22 and 27 June 2001. On 13 July 2001 Kabui J accepted that the Plaintiffs were not at the Timber Rights hearing in April 1989 and that the Harero Land which they claimed to be theirs had been included in the Timber Rights Agreement without their authority. He found that there were clearly triable issues between the parties and that if the Defendant resisted the continuance of the interim injunction it should have appealed. There had been no defect or omission in the evidence at the ex parte hearing and there was no reason to discharge the ex parte order of 26 September so that that order continued until the trial of the action which has already been too long delayed.
[9] The Defendant appealed to this Court on a number of grounds which reflected their earlier grounds of opposition to the continuance of the interim injunction. The first was that the Judge had wrongly exercised his discretion and had “misapplied the trite legal principles for granting injunctions, particularly sufficient interest, triable issue with prospects of success, adequate compensation, maintenance of status quo, relative strength of parties’ case and undertaking.” The Defendant further contended that the judge had given insufficient weight:

(i) to the Defendant’s submissions that timber rights had been granted to the Defendant;
(ii) to the evidence that the Plaintiffs knew or ought to have known of the Defendant’s application for a felling licence and ought to have appealed against the Area Council’s determination of that matter; and
(iii) to the Defendant’s contention that the Plaintiffs delayed their challenge to or acquiesced in the Defendant’s possession of the felling licence.

[10] The Defendant also took a preliminary point that the Judge had erred in not treating the hearing as an inter partes hearing. This was largely based on the Judge’s statement that the hearing of the Defendant’s motions in February and June 2001 “almost assumed the character of inter partes hearing of the Plaintiffs’ action. However it was not the hearing of the Plaintiffs’ action.” From the notes of the hearing it is plain beyond argument that the Judge did treat the hearing as being inter partes. Both parties were represented by counsel and evidence was called and affidavits produced. There is nothing in this point.
[11] The other grounds in part overlap and the Court deals with the substance of them.
[12] There is clearly a dispute between the parties as to many issues of fact but the Court does not have to resolve them at this stage. The critical first question is whether there is a serious issue to be tried and whether there is prima facie evidence to support the plaintiff’s case. There clearly is such an issue as to whether the defendants had a valid licence to fell trees on the Harero Land and the plaintiffs can point to the fact that the Harero Land was not expressly included in Form 2 the Certificate of Customary Ownership.
[13] Moreover there was evidence even if disputed that the Harero Tribe was not represented at the Timber Rights hearing.
[14] Agnes Votaia’s oral evidence at the inter partes hearing and the evidence set out in her affidavits of 8 September, 23 October 2000 and 12 February 2001 clearly support the plaintiffs’ claim to the land, even though that is in dispute and even if the issue has to be decided ultimately by the Local Court under the Local Court Act. Such evidence also corroborates the claim in the action that the plaintiffs were opposed to their land being logged by the defendant. The learned judge was justified in saying in his ex parte judgment that “any attempt by the Defendant to enter Harero Land and remove trees therein without being in possession of a licence would be total disregard of the wish of the Plaintiffs to conserve their trees and land.”
[15] In the opinion of this Court there was evidence which if accepted at the trial would be sufficient to justify the granting of the injunction. The fact that there is evidence the other way has to be taken fully into account but it cannot be said that the plaintiffs’ case in comparison with that of the defendant’s is so weak that no interim injunction should be granted. In considering the balance of convenience it is in the view of this Court clearly right that further logging should not have taken place until the issue of the validity of the licence had been determined even though it is regrettable that, due in part to factors outside the control of the plaintiffs, the issue of land ownership could not be pursued before the Local Court.
[16] The Judge considered that if the plaintiffs were refused an interim injunction but won their case they would not be adequately compensated for their loss. This Court cannot see an error in this conclusion. The Defendant however says that conversely the Judge should not have granted an interim injunction without requiring a cross-undertaking in damages to compensate.
[17] The Judge mentioned in his ex parte judgment that the plaintiffs had “not made any undertaking to compensate the Defendant for their loss if I [grant] the injunctive order against the Defendant and it wins its case.” It seems that he decided in his discretion to grant the injunction without an undertaking as to damages because not to maintain the status quo “may result in the disappearance of the trees still standing and further damage to the land and the rivers in that area of land.” At the inter partes hearing he was asked that it should be a condition of continuing the injunction that the Plaintiffs gave a written undertaking in the sum of $50,000. In her affidavit of 23rd October 2000 Agnes Votaia said that in view of the matters stated in paragraph 12 of Mr Wong’s affidavit of 11 October 2000 the Plaintiffs were not inclined to make an undertaking. To continue the logging would mean that “the destruction that would be caused on our land would be enormous. The land would be spoilt and the trees that had been there since time [immemorial] would be gone forever. No money could fully compensate what would have been damaged by the Defendant.” In the inter partes judgment the judge does not discuss the question of an undertaking and none was required.
[18] It is of course the usual practice to require a cross-undertaking in damages as a condition of the grant of interim relief and there is force in the Defendant’s contention that the Judge should have done so here. On the other hand although he did not say so expressly in his inter partes judgment it seems to the Court plain that his reason for not requiring an undertaking was due to his opinion that not to restrain the defendant was going to have a very serious effect not only on the profits of the Plaintiffs but on the “disappearance of the trees still standing and future damage to the lands and the rivers in the area of the land.” There was in other words an environmental public interest in maintaining the status quo pending a decision of the Court.
[19] The Defendant did not pursue this point by way of a specific appeal to this Court as a matter of urgency and it is now more than three years since the inter partes injunction and four years since the ex parte injunction was granted.
[20] Taking all these matters into account this Court concludes:

(a) that there were exceptional circumstances which justified the Judge’s decision not to impose an undertaking;
(b) that the failure to require a cross-undertaking even if it can be said to be wrong in principle does not invalidate the injunction already granted; and
(c) that in any event it would not be appropriate for this Court in the exercise of its discretion to require an undertaking as a condition of the continuance of the injunction.

[21] We accordingly dismiss this appeal. We remind the parties that in his judgment of 13 July 2001 Kabui J said “The quicker the trial date is fixed for the Plaintiffs’ action, the better it is for the parties.” We are now three years on. An application by either party to ensure that this happens will be sympathetically considered by the Court. If it is the Plaintiffs who cause delay in future the question of a cross-undertaking may have to be reviewed. Costs in the cause.