Bako v Rozo [2012] SBCA 15; CA-CAC 42 of 2012 (30 March 2012)

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IN THE SOLOMON ISLANDS COURT OF APPEAL

NATURE OF JURISDICTION:	Appeal from Judgment of the High Court of Solomon Islands (FAUKONA J)

COURT FILE NUMBER:	Civil Appeal Case No. CA. 42 of 2011 – Appeal from High Court Civil Case No. 366 of 2011)

DATE OF HEARING:	27 March 2012
DATE OF JUDGMENT:	30 March 2012

THE COURT:	Sir Robin Auld, President
	Sir Gordon Ward, JA
	Justice Michael Adams, JA

PARTIES:	James Bako & Ors - Appellant
	(Reps/Thogokama Tribe )

	-V-

	Lepping Gedi Gorence Rozo & Ors - 1st Respondent
	Glengrow (SI) Company Ltd - 2nd Respondent

ADVOCATES:
Appellant:	D Hou
Respondents:	N Laurere

KEY WORDS:	Interim Injunction

EX TEMPORE/RESERVED:	RESERVED

ALLOWED/DISMISSED:	ALLOWED

PAGES:	11

[1] The appellants sought an interlocutory order from the High Court restraining the respondents from entering Bagaho customary land on Isabel for the purpose of felling any trees of economic value and milling or removing any timber. It also sought orders for the removal and sale of any trees already felled and payment of the proceeds into a joint trust account in the names of the lawyers of the parties together with an accounting for all timber already shipped and exported.

[2] It was heard by Faukona J on 27 October 2011 and, in a reserved judgment delivered on 22 November 2011, he refused the application. The appellants filed Notice of Appeal on 29 November 2011.

[3] Subsequently, on 11 January 2012, the appellants purported to apply to a single judge of this Court for an interlocutory order "on the basis of the appeal now filed against the said judgment" effectively repeating the terms of the order sought from, and refused by, Faukona J as an "interim Order [to] prevent prejudice to the claims of any party pending an appeal pursuant to section 19(f) of the Court of Appeal Act".

"4. An Order that all the relevant costs pertaining to the preparation of the Appeal book and the security of costs be waived on the principle that no one should be prevented from pursuing a case on the basis of lack of money and the fact that the appeal raises important points of law that ought to be determined."

[5] At the hearing before us, Mr Hou for the appellants, explained that the filing of the fresh application to this Court was in order to preserve the property pending appeal and that he had tried unsuccessfully to have the application, including the request to waive costs, listed before a single judge.

[6] The written submissions of the appellants also include a further application to this Court, that:

"Leave will also be sought [i.e. in the principal appeal] to use a sworn statement to give a short brief about the process before the chiefs' court."

[7] We granted leave to file the statement and refer to it further at paragraph [45] below.

[8] The case in the High Court arose from a dispute between the applicants and the first respondents as to who were the landowners of the customary land, Bagaho, on which the second respondent has been logging at least since June 2010 It is not necessary to go into the facts of the case in any detail.

[9] In summary, the Isabel Timber Company Ltd was issued with a felling licence, number Tim 2/32, issued on 29 October 1991 in respect of areas known as Hograno, Havilei/Kokota and Kia/Katova. They had signed a logging agreement with the landowners in the area of the Kia/Katova Area Council on 2 July 1991. Approval was granted on 18 February 2009 to assign the felling licence to the second respondent and, by a supplementary agreement stated to be between the Bagaho land owners and the second respondent, it was agreed that the logging would be carried out by the latter.

[10] The respondents' evidence is that logging started in late 2009 or early 2010 whilst the appellants state that the logging of Bagaho land commenced in or around June 2010. It appears that, when the statement of the first appellant was sworn on 14 September 2011, a total of six log shipments had been exported by the second respondent.

[11] Both the appellants and the first respondents claim to be the lawful landowners of Bagaho customary land. The Local Courts Act and the Land and Titles Act reserve jurisdiction to determine any customary land dispute to the local court but, by section 12 of the former Act, any issues of customary land ownership must first be referred to the local chiefs. The local court can only accept such cases if it is satisfied that the parties to the dispute had referred the dispute to the chiefs.

[12] In order to start the process of determining their rights to Bagaho land, the first appellant wrote to the chairman of the Hograno House of Chiefs on 18 July 2011 inviting the chiefs to conduct a hearing on their claim to be the rightful owners.

[13] On 14 September 2011 the appellants filed a claim in the High Court seeking the interlocutory injunction referred to in the first paragraph above. As stated, the application was rejected by the learned judge.

[14] The Court dealt with this application first. It is submitted that the appellants do not have adequate money to instruct a private lawyer and should be excused payment for security for costs and for preparation of the appeal book. There is no evidence of the financial means of the appellants or the people they represent. Counsel for the appellant appears to have based the application solely on his clients' instructions that they have no funds. This bald statement has apparently been sufficient to persuade the Public Solicitor to take the case on legal aid and the judge in the court below to hear the application for an injunction with no undertaking in damages having been given. It is now placed before this Court in the same terms, still with no evidence to support the assertion.

[15] The notice of appeal was filed on 29 November 2011. We understand from the respondents' written submissions that, on 2 December 2011, the registrar e-mailed the appellants requesting $2000 for the preparation of the record and $20,000 security for costs under rule 12 (1) (b) (i) and (ii) respectively.

[16] Section 15 of the Court of Appeal Act provides that, subject to the discretion of the Court, "the Court of Appeal shall not entertain" any civil appeal unless the appellant has fulfilled all conditions of appeal under the Rules. By rule 7, the conditions precedent are set out in rules 8, 10, 11 and 12 and payment of any sums requested under rule 12 is one such condition. The sums requested on 2 December 2011 have not been paid and yet, despite the appellants' failure, the appeal has been listed before the Court for hearing of the appeal.

[17] Despite the mandatory terms of section 15, section 16 gives the Court the power to allow a civil appeal on any terms it considers just. Clearly, this includes the power to waive costs in an appropriate case. It has been repeated in many jurisdictions that a litigant should not be deprived of his rights for no other reason than that he is poor.

[18] It is quite clear, however, that such an application should have been made prior to the listing of the appeal. Section 19 gives a single judge of the Court the power to hear applications for various preliminary orders including applications to appeal in forma pauperis. Listing the appeal for hearing by the full court before such an application has been made contravenes section 15. It also means that, if the application is refused, the appeal will have to be adjourned and thus waste the time of the Court. However, we accept Mr Hou's statement that he had tried unsuccessfully to have it listed before a judge and so we have heard the application.

[19] One of counsel's submissions was that the registrar was wrong to have imposed such a condition without there having been an application by a party to the appeal. That confuses conditions ordered under rule 12, as was clearly the case here, with the right to seek special conditions under rule 11.

[20] We would also remind counsel that an application to waive security must be supported by evidence of the applicant's lack of means. In the present case it appears no such evidence was prepared for the single judge and is still not provided to this Court. We are, in consequence, being asked to make a decision with no more evidence of the appellants' means than his totally unsubstantiated instructions relayed to us by counsel. We were also concerned to hear that such an assertion was accepted by the Public Solicitor as sufficient to satisfy the requirements of section 4(a) of the Public Solicitor's Act.

[21] This was a totally unsatisfactory situation but, if the appeal was not to be delayed until the next session of the Court, we were obliged to hear the application. In those circumstances, we waive the order for payment for preparation of the record and for security for costs. Should a similar situation arise in future, it is unlikely the Court will be so accommodating.

[22] The notice of appeal raises four grounds. We do not repeat them in detail. The first, in particular, is prolix and descends into detail more appropriate to written submissions in which, indeed, they have been repeated and amplified. The Court is not assisted by such grounds and counsel should always strive to state their appeal grounds concisely and succinctly.

[23] In summary, the first ground is that the learned judge has "failed to take account of and/or mistaken the effect of relevant factors". In support, the appellants have repeated the submissions made to the judge and assumed that, in each case, absence of any specific reference in the judgment, must mean he has misunderstood or determined it incorrectly.

[24] Grounds 2 and 3 challenge the validity of the procedures leading to the timber licence, a matter already covered in paragraph (f) of the first ground. Ground 4 suggests the judge failed to consider or mistook the reasons for the delay and challenges his conclusion as to the relationship between timber rights and ownership of the land.

[25] In his judgment, the learned judge correctly considered the various matters relevant to such an application and set them out under separate headings. He first dealt with locus standi and found that the appellant had standing to bring the action.

[26] On the question of the appellants' delay in challenging the timber licence and the logging agreement the judge refers to the delay of 19 years before the logging started and the appellants' failure to take any action. He correctly points out, on the authority of Gandly Simbe v East Choiseul Area Council and others [1999] SBCA 9, that the delay was a factor relevant to the exercise of his discretion whether to grant an injunction. He concluded:

"...until the logging operations commenced in June 2010 the claimants for the first time rely on the claim currently advanced. In fact it was one year after the operation that Mr David Bako wrote a letter to the Hograno House of Chiefs to convene and hear the claim of ownership. They have sat on their rights ever since, and that is not good enough."

[27] It appears the judge is correctly limiting his consideration to the period since logging started. The appellants' case was that, until that started, they were unaware of the grant of timber rights. The judge does not state his conclusion as to the effect of that delay although he stated he was treating it one factor to be taken into account in the final decision.

[28] His next consideration is whether the applicants have shown there is a serious issue to be tried and the need for a pre-existing cause of action on which to base the consideration. The appellants' case is that the reference to the Chiefs is a sufficient step to institute proper proceedings to pursue a claim to ownership of the customary land in question. No response had been received and the Judge found that the issue of ownership "has yet to be filed in the chief's tribunal" and that the letter of 18 July 2011 amounted to no more than an inquiry about the possibility the chiefs would hear it.

[29] His conclusion that, "in any event the issue of ownership of land becomes, as usual, a serious and triable issue which has to be determined. The claim which seems to gain momentum is straight forward as opposed to the timber rights determination. I have taken cognizance that the sooner the chiefs determine the issue the better" suggests he has accepted there was an arguable cause of action.

[30] Under the heading "irreparable harm", he considers the adequacy of damages and suggests:

"The question to ask is will the claimants suffer irreparable harm that cannot be adequately compensated by damages; and there is unlikely harm to the defendant [which] cannot be compensated by the claimant's undertaking as to damages. The Court will normally grant injunctions in such circumstances."

[31] In this case there is no undertaking secured by the claimants to adequately compensate any damages that may harm the defendants. The reason as stated is because the claimants are village people with no source of income at all. His conclusion, "that the issue of undertaking and adequacy of damage is only one factor to be taken into account in determining the balance of convenience" does not effectively answer his question.

[32] It is against that background that he considers the balance of convenience; a matter that only arises if he has found that damages would not provide an adequate remedy. He states:

"Balance of convenience means that the court is not balancing the convenience of the parties, but must consider the risk of doing injustice to the parties. In any event each party may suffer harm if the injunction is granted, and the claimant fails at trial, or if the injunction is not granted and subsequently the claimant succeeds at trial. In such circumstances the court must consider the balance of convenience whether to grant or refuse granting the interlocutory injunction.

Mr Hou submits that six shipments had been gone and good majority of virgin forest still to the logged. To allow logging to continue whilst awaiting determination by the chiefs meant a good volume of damages is expected which cannot be adequately compensated from the land. There is need to preserve the land from further damages.

On the overall, may I ask, on what basis does the claimants brought this case; is it on timber rights process or claim for trespass and damages. From the claimants point of view it is not a challenge to the timber rights process or a claim for trespass and damages or even for judicial review. If so, it is apparent, that all relevant gateways had been closed. It remains one reason that is a challenge to the customary ownership of the land. It may seem the claimants may have the privilege to bring the issue of ownership in the chiefs hearing. And whilst that right is still open to pursue, where does the balance of justice lies.

To conclude, the claimants may not be rich enough to provide undertaking, or late to file a claim, but the issue of ownership remains significant to determine there is evidence that the case may go either way. However the cases of Simbe and Basil Manepuhi and others v Marovo Development Company Ltd [2010] SBHC 75, seem to advocate a corresponding and a very important point. That is the filing of the claim has yet been recognised in the chiefs' tribunal. Simbe has made it clear that has to be done before it was made the basis of the claimant's claim for an injunction in the High Court. There is no claim file with the relevant house of chiefs. That tips the balance of convenience on the defendants. I therefore refuse to grant interlocutory injunction as sought."

[33] Despite the appellant's submission that the learned judge misunderstood these various aspects of the case, it appears from the last paragraph that his final decision to refuse the injunction is based entirely on the his view that there must be a case in progress and whether the claim has been properly brought before the chiefs.

[34] His conclusion is that there is no claim filed with the relevant house of chiefs. That finding tipped the balance of convenience in the respondents' favour and was the reason for his refusal to grant the injunction.

[35] This aspect of the case was considered during the judge's examination of whether there was a serious issue to be tried. He found that the ownership of Bagaho land constituted such an issue and acknowledged that the appellants were relying on the letter of 18 July 2011 to the Hograno House of Chiefs "as a basis to come to court and seek injunctive orders. The purpose of injunction is to preserve the status quo until the core issue of ownership is determined". He continues:

"From my perspective view, it appears that letter was an initial arrangement or request for an administrative process that may lead to the conduction of the chiefs hearing. The fact is that there is no guarantee that Hograno chiefs will hear the dispute unless both parties agreed to. In any event sections 11 and 12 of the Local Court Act have been complied with. Though the lie of a range may require time, however, reflective of the true intention of the complainants.

Despite whatever the outcome may be, the intention is recognised as one which desired a customary resolution of the ownership of Bagaho land. And that has to come from a forum empowered, or having legitimate jurisdiction to exercise. When the case is heard by the chiefs is anybody's guess."

[36] As we understand that passage, the judge is accepting that the case will depend on a determination of the ownership of Bagaho customary land, that it is a proper cause of action and that the first step in having it determined is to refer it to the chiefs but, later, concludes the letter from the applicants to the chiefs was not sufficient to amount to a referral.

[37] The letter of 18 July 2011to the Hograno chiefs was addressed to the Chairman, Hograno House of Chiefs and copied, inter alia, to "John Lepping's Group (Rogisi Clan)".

"This letter serves to inform your office as chairman of Hograno House of Chief that I as the spokesman for the Thogokama Tribe representing Ben Ngago, Japhet Munai and James Bako of Furuno and Moluforu Village of Katova district wish to formally invited the Hograno House of Chief to conduct a Chief hearing on Bagaho customary land. This invitation was made on an understanding that Hograno House would be more neutral to hear such our case.

The disputed land was between our Group and John Lepping Gedi's group of the Rogisi Clan who were from Kia and Sisiga village respectively. Our group thought that it is proper to bring this matter to the chiefs for customary determination of ownership.

It would be very grateful if you could convey this to your committee and possibly the date and venue for such hearing.

With this remarks, I thank you for your understanding and consideration in this matter. Hoping and looking for to hear from you very soon."

"In this case the issue of ownership has yet to be filed in the chiefs tribunal. What the claimants did were mere enquiries where possible the Hograno house of chiefs to hear the issue."

[40] He finds that the letter: "has [not] yet been recognised in the chiefs tribunal. Simbe has made clear that has to be done before it was made the basis of the claimants claim for an injunction in the High Court. There is no claim file with the relevant house of chiefs."

[41] The appellants submitted that their letter to the Hograno chiefs is the first step in pursuing the issue of land ownership. They point out that, whilst the Local Courts Act requires a local court to be satisfied that the dispute has been referred to the chiefs as a condition of its assumption of jurisdiction, it gives little or no guidance as to how such reference is to be made. What, the appellants ask, can they do but write and request the chiefs to consider their claim.

"12. (1) Notwithstanding anything contained in this Act or in any other law, no local court shall have jurisdiction to hear and determine any customary land dispute unless it is satisfied that –

(2) It shall be sufficient evidence that the requirements of paragraphs (a) and (c) of subsection (1) have been fulfilled if the party referring the dispute to the local court produces to the local court a certificate, as prescribed in form 1 of the Schedule, containing the required particulars and signed by two or more of the chiefs to whom the dispute has been referred.

(3) In addition to producing a certificate pursuant to subsection (2), the party referring the dispute to the local court shall lodge with the local court a written statement setting out --

[43] The respondents disputed, in the lower court, that the Hograno chiefs were the right chiefs to determine the ownership of Bagaho land. By section 11, the reference to "chiefs" in section 12 means "chiefs or other traditional leaders residing within the locality of the land in dispute and who are recognised as such by both parties to the dispute"[our emphasis]. The appellants accept that the Hograno chiefs do not reside in the locality and that the appropriate forum to determine claims to Bagaho land is the Katova House of Chiefs.

[44] At the time of the hearing in the High Court, the evidence before the learned judge was that there had been no response to the letter of 18 July 2011. The evidence the appellant sought to place before this Court was a further statement from the first appellant sworn on 27 March 2012 explaining the present position and also setting out why the appellants did not feel it appropriate to refer the matter to the Katova chiefs.

[45] He explains that, in order to follow up on his letter, he had been able to meet the Chairman of the Hograno House of Chiefs in Honiara over the last Christmas break to ask to about the possibility of hearing the Bagaho land dispute. He continues:

"His verbal response to me was that after he received our said letter, he was able to meet the Chairman of the Katova panel/House of Chiefs in whose area the Bagaho customary land is situated and discuss the matter with him. That is necessary as the Hograno House of Chiefs cannot hear the matter without the consent of the Katova House of Chiefs.

Unfortunately, the Chairman of the Katova House of Chiefs is not willing to work together to ensure that the land dispute is heard quickly. His name is Chief Edward Vunagi. The only reason he is not willing to work together with the Hograno Chiefs is that he was one of the signatories to the Form IV logging agreement in this case. He clearly has an interest to stop the hearing proceeding before the Hograno House of Chiefs. That is the only reason why the Hograno House of Chiefs cannot hear the land dispute.

There is no legal rules to govern this sort of thing and in the village people would have resolved such issues by consensus. This is the cause of the delay.

Since he was not able to consent to the Hograno Chiefs hearing the land dispute, there is another hold up not caused by us the claimants/appellants who want to have the dispute heard by the Chiefs. We will do and are ready and willing to do anything required by the Hograno House of Chiefs to hear the land dispute."

[46] It is unfortunate that section 12 of the Local Courts Act gives no guidance on the form, manner or timing of a reference to the chiefs. All these matters may involve various customary protocols but it would undoubtedly assist both future applicants and the local court if at least a basic timetable could be provided. Section 30 of the Act allows appropriate rules to be drafted to ensure reasonable expedition in the process without intruding on the requirements of customary protocols in dealings with the chiefs. In the absence of further guidance, we accept that a letter to the chiefs can be, and was in this case, an appropriate method of initiating such a reference.

[47] The number of logging operations, the effect on the environment, the cost to the logging companies and the, often opposed, opinions of the landowners both living on the land and living elsewhere has spawned repeated claims in courts. In most of these claims, the interests of all possible parties require a prompt decision. With or without further rules, the chiefs must recognise their responsibility to settle these references to them with appropriate expedition.

[48] We consider that, had the learned judge known of the contents of the statement presented to us today, he may well have reached a different conclusion as to the significance of the letter of 18 July 2011 and the status of the reference to the chiefs.

[49] We are also concerned with the manner in which the adequacy of damages was considered. The passages in the judgment do not, with respect, indicate with any clarity how the judge determined that issue.

[50] In many commercial cases, the means and circumstances of the applicants are widely known or sufficiently ascertainable for the court to accept their ability to honour their undertaking without further inquiry.

[51] In most logging cases in this jurisdiction, it is the landowners who apply for an injunction but their ability to meet their undertaking in damages is frequently questionable. In consequence, a court considering the adequacy of an award of damages as a remedy should the landowners subsequently lose their claim, must take a realistic of their ability to pay and the protection left for the other party.

[52] This is particularly critical when the application is for an interim injunction to halt an operation which has already started. The consequences both to the landowners and to the logging companies of such an injunction are so serious that the possibility of damages being an adequate remedy for the grant or refusal of an injunction is a matter on which the court must have sufficient information to make an adequately reasoned decision. The papers before us give no indication that the learned judge was provided with sufficient evidence to assist him on this aspect of the case.

[53] This Court, as with the hearing in the court below, has been advised of the applicants' almost total lack of means. It has already meant they have not been required to give the usual undertaking and there can be no doubt the applicants would not be able to pay any damages. Making such an award would, in consequence, be a futile remedy to the respondents. Clearly an undertaking in damages can provide an adequate safeguard but, in many cases, it should not simply be assumed to be sufficient. Where the court considers further information is needed, it should adjourn to allow it to be provided.

[54] In all cases where application is made to restrain the other party, the court must consider the likelihood of success when deciding whether an injunction is appropriate. If the court is satisfied the applicants have a reasonable chance of success in the principal action, it may consider that any inability to give a meaningful undertaking is not a sufficient obstacle to such an order.

[55] Unfortunately, in logging cases, the provisions of the Local Courts and Land and Titles Acts prevent the court from determining the merits of the issue at the core of the case; namely, the competing claims to ownership of the customary land involved. That makes it essential the court is provided with sufficient information to make an appropriate order.

[56] Logging cases in this country present some special difficulties. We feel two aspects require particular consideration in order to assess the overall justice in an application for interim restraint. In neither does the judge appear to have had sufficient information to make a properly reasoned decision.

[57] First is the consequence of such an order in the circumstances of the case under consideration. The effect of an interim injunction on a commercial operation can be financially devastating and, in many cases, detailed evidence of the consequences, both financial and practical, is essential if the court is to be able properly to evaluate the position especially, as here, where damages cannot provide an adequate remedy.

[58] In cases involving logging operations it may be particularly significant. The effect of logging on the environment can be damage which will take decades to remedy and a decision to refuse an injunction may be devastating to both present and future residents of the land affected; a decision to grant an interim injunction may destroy the company so restrained. No court should make such a decision on inadequate information of the need for, and consequences of, an injunction.

[59] This is so widely accepted that one would expect that both the party seeking the injunction and the party to be restrained would ensure adequate evidence is provided to the court. Time in such cases may be critical but the consequences of such an order are generally serious enough to justify a short delay to allow adequate preparation of the necessary evidence.

[60] Specific evidence is the only effective answer to such generalisations. It may show, for example, that an injunction will only apply to part of the concession area and will cause the loggers little more than a change of location of operations. In others it may mean the total cessation of all activity leaving machinery and skilled operators idle and shipping schedules needing to be changed or cancelled. In some cases, it may adversely affect members of the same landowning group who have obtained employment with the company or whose income arises indirectly from the presence of the logging operations.

[61] As has been mentioned, refusal may cause long term or irreparable damage to native plants and animals, to allotments, natural water supplies and the surrounding marine environment. The environmental damage is well recognised and does require specific evidence of the overall effect but the court should have any information specific to the case under consideration including the area and position of the logging and the likely amount which will be likely pending determination of the ownership issue. It is not enough simply to assume serious environmental consequences any more than it is to speculate whether, or assume that, the company has adequate reserves to survive any restriction on its activities.

[62] Second is the true urgency of the case under consideration. In some cases, evidence may show that widespread damage will occur over the likely time the injunction will remain in force whilst, in others, it may be clear that only minor logging will take place because the area involved is limited or the terrain is difficult or the main operations are directed to areas outside the disputed land. The effect of logging is always substantial but the need for an immediate or rapid response by the imposition of an injunction varies from case to case and must be assessed on the particular circumstances of the matter under consideration. Such an assessment can only be made if the court has the necessary information.

[63] In the present case, the learned judge, whilst deprecating the delay, did not appear to reach a conclusion as to its effect. Clearly, logging had been taking place for at least a year before the letter was written to the chiefs in July 2011. Up to the filing of this application in September 2011, a total of six or seven shipments of logs had been exported by the second respondents but the court does not appear to have been told whether they all came from the disputed land or partly from adjacent lands covered by other logging agreements or of the speed the company's operation was likely to encroach further.

[64] We are satisfied that the judge was wrong in concluding that the letter to the chiefs was not a sufficient step to commence a claim to the customary land. That was the sole ground for his refusal. In order to reach a proper decision, he needed sufficient information to consider the overall effect of making or refusing the application but he was provided with little or no relevant information by either party. As a result he was unable to reach a conclusion about the effect of the applicant's delay or of their lack of ability to pay damages; both important aspects of the case.

[65] We allow the appeal and set his order aside. The case is remitted to the judge to set a timetable for the submission of evidence of the matters to which we have referred. On receipt of any such further evidence he will set the application for hearing.

Court of Appeal of Solomon Islands

Bako v Rozo [2012] SBCA 15; CA-CAC 42 of 2012 (30 March 2012)