Glengrow (SI) Company Ltd v Mega Enterprises Ltd [2014] SBCA 18; SICOA-CAC 22 of 2013 (17 October 2014)

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. 22 of 2013 (On Appeal from High Court Civil Case No. 129 of 2013)
DATE OF HEARING:	15 OCTOBER 2014
DATE OF JUDGMENT:	17 OCTOBER 2014
THE COURT:	GOLDSBROUGH P., WILLIAMS JA, WILSON JA
PARTIES:	Glengrow (SI) Company Ltd Appellant -V – Mega Enterprises Ltd Respondent
Advocates: Appellants: Respondent:	DNS & Partners D. Marahare Appellant Rano & Company W. Rano Respondent
Key words	Section 33 and 37 of Forest Resources and Timber Utilization Act – procedure.
EX TEMPORE/RESERVED:	RESERVED
ALLOWED/DISMISSED	DISMISSED
PAGES	1-5

JUDGMENT OF THE COURT

The appellant, Glengrow (SI) Company Limited, appeals by leave against an order made by Faukona J staying an enforcement order issued by the Registrar on 12 June 2013.

The relevant background facts are as follows.

On 11 May 2011 the Commissioner of Forests seized pursuant to s.33 of the Forest Resources and Timber Utilization Act logs felled by Ruruma Development Company (Ruruma) and machinery and logging equipment belonging to Mega Enterprises limited (Mega) on the ground those entities had no right to fell the logs in question. The logs were taken from Lots 17 and 18 which were subject of a licence granted to the appellant.

Pursuant to s.37 of the Act Ruruma filed an appeal in the Magistrates Court against the seizure: Appeal 83/2011. Then Mega filed an appeal: 85/2011. A Magistrate then made orders on 15 June 2011 in those appeals permitting the export of the seized logs with the proceeds held on trust. Subsequently Glengrow lodged an appeal (87 of 2011) on the basis it was entitled to the logs. The Principal Magistrate then made orders on 29 June 2011 consolidating those three appeals and made further orders relating to the export of the logs. Both orders required the proceeds of the export of the logs to be deposited in the Central Bank of Solomon Islands.

In January 2012, Mega and the Commissioner of Forests resolved their differences. A Deed was executed on 26 January 2012. On payment of SBD 750,000 by Mega its property was to be returned to it and it agreed to withdraw its appeal. That Deed provided that the $750,000 was to be "paid... out of funds held in trust as ordered by the Central Magistrate Court." Ruruma was also a party to the Deed and by it agreed to withdraw its appeal. Notices discontinuing those appeals were duly filed. Neither the Deed nor the filing of the notices of discontinuance affected the validity and continued effect of the seizure of the logs.

The appellant was not a party to that Deed and the Magistrates Court was not informed that it purported to vary the terms of the order made on 29 June 2011. Other material in the record discloses that prior to January 2012 Ruruma and Mega had ascertained that the Central Bank of Solomon Islands would not accept the deposit as directed by the order and in fact no moneys were deposited with that Bank. Mega entered into the Deed with full knowledge its precise terms could not be carried out. The Magistrates Court was never told no moneys were deposited as ordered and the final order of that court on 31 August 2012 referred to money deposited in the Central Bank.

Then in what was left of the consolidated proceeding the Principal Magistrate determined in August 2012 that Glengrow was entitled to the seized logs, or the proceeds thereof, as it held the grant of profit over the land from which the logs were extracted.

The Magistrate held that the sum of SBD 1,373,479.01, being the proceeds of the export of the logs, be paid to Glengrow. He correctly held that as the owner of the seized logs it was entitled to the money sum received from the export.

On becoming aware that the proceeds had not been paid into Central Bank of the Solomon Islands as directed an enforcement order was sought and obtained in June 2013. It was directed to Mega, Ruruma and the Attorney General representing the Commissioner of Forests. Why the latter was a party will be dealt with later.

Once Ruruma and Mega discontinued their appeals they no longer could assert any claim to the seized logs. The Magistrate was left with the appellant's appeal (87 of 2011) and both it and the Commissioner of Forest Resources submitted pursuant to s.37 of the Act that the appellant was alone entitled to the logs or the money into which they had been connected.

On the hearing of the application to stay the enforcement order counsel for Mega and Ruruma submitted, and the judge hearing the application appeared to accept, that not all the seized logs came from the appellant's land. But it was too late for any such contention to be raised. Each of Mega and Ruruma had conceded they had no interest in the seized logs by discontinuing their appeals. Neither had any right to be heard when the Magistrate was concerned with the disposition of the logs in appeal 87 of 2011. The Judge at first instance appears to have held that, though Mega and Ruruma had filed notices of discontinuance, each had a right to be heard subsequently when the Magistrate was finally determining pursuant to s.37 who owned the logs. In so holding he was wrong. The Magistrate clearly had jurisdiction under s.37 to make the order he did. At first instance, it appears to have been held that, after the filing of the notices of discontinuance, the Magistrate lacked any jurisdiction to make orders in the consolidated proceeding. But 87 of 2011 remained alive and the court clearly had jurisdiction to make orders after hearing from the appellant and the Commissioner. That is what happened. Those submissions were again made in this Court but for the reasons indicated they must be rejected.

As noted above the Deed between Mega, Ruruma and the Commissioner was dated 26 January 2012. The schedule provided that the $750,000 should be paid in five instalments with the last payment on 31 of May 2012. Only the first instalment of $250, 000 on 27 January 2012 was in fact paid. As indicated by the letter of that date the machinery of Mega which had been seized was returned to it on 27 January 2012. The remaining $500,000 was not paid to the Commissioner until 1 March 2013.

Once the appellant was aware no money had been deposited with the Central Bank and that the Deed provided for payment to the Commissioner of $750,000 out of the trust funds it entered into negotiation with the Attorney General and the Commissioner. That resulted in the Attorney General by Crown Counsel writing on 31st August 2012 to the appellant stating that the Commissioner had agreed to return the $750,000 to the appellant. That has not yet been done and that is why the Attorney General representing the Commissioner was made a party to the enforcement proceedings. The Attorney General after service indicated he did not wish to actively participate in the proceedings. The appellant is clearly entitled to the $750,000 and it is to be expected that the Commissioner will honour his agreement to pay it to the appellant.

On the assumption the $750,000 was paid by the Commissioner to the appellant only the balance, namely $623,479.01, would remain to be recovered from Mega or Ruruma.

The appeal should be allowed and the order staying the enforcement order should be set aside. Mega and Ruruma should pay the costs of Glengrow of the appeal and of the application to set aside the enforcement order.

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Goldsbrough P
President of the Court of Appeal

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Williams JA
Member of the Court of Appeal

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Wilson JA
Member of the Court of Appeal