Korean Enterprises Ltd v Attorney General [2014] SBCA 4; SICOA-CAC 12 of 2013 (9 May 2014)

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NATURE OF JURISDICTION:	Appeal from Judgment of the High Court of Solomon Islands (Mwanesalua PJ)
COURT FILE NUMBER:	Civil Appeal Case No. 12 of 2013 (On Appeal from High Court Civil Case No. 357 of 2012)
DATE OF HEARING:	MONDAY 5^TH MAY 2014
DATE OF JUDGMENT:	FRIDAY 9^TH MAY 2014
THE COURT:	Justice Goldsbrough JA, President Justice Williams JA Sir Gordon Ward JA,
PARTIES:	Korean Enterprises Limited - Appellant -v- Attorney Respondent
Advocates: Appellants: Respondent:	Radclyffe for Appellant Muria for Respondent
Key words	Compulsory Acquisition – Public Purpose.
EXTEMPORE/RESERVED:	Reserved
ALLOWED/DISMISSED	ALLOWED
PAGES	1 - 6

Prior to April 2012 the appellant was registered as the owner of leases for 75 years over 22 parcels of land having a total area of approximately 49 hectares situated at Ndoma on West Guadalcanal (“the subject land).

By Notice of Compulsory acquisition of land issued pursuant to s. 71 of the Land and Titles Act (Cap.133) (“the Act”) and dated 26^th April 2012, and order published in the Solomon Islands gazette on 27 April 2012, all of the subject land was declared to be resumed for a “public purpose” stated to be “for the purpose of developing fisheries in the Solomon Islands.”

By claim filed 24 September 2012 the appellant challenged the validity of the assertion that all the subject land was required for a public purpose. The appellant contended that the land was being acquired for “use by Korean private investors and not for a public purpose”. It asked that the declaration resuming the land be quashed pursuant to s. 76 of the Act. The defence filed 29 October 2012 put the allegations in the claim in issue.

A sworn statement of Myung Shin Kim filed 24 September 2012 supported the claim and one by Dr. C. Ramofafia filed 13 December 2012 supported the defence.

The matter was heard by Mwanesalua J on 12^th March 2013 and judgment was delivered on 31^st May 2013. It was declared that 19 hectares of the subject land was required “for public purpose” and 30 hectares should be restored to the appellant. Neither the 19 hectares nor the 30 hectares was identified, and the order did not quash the declaration is so far as it applied to the 30 hectares.

Pursuant to leave granted on 8 October 2013 the appellant appeals against the decision of 31 May 2013. Essentially the appellant contends that the trial judge erred in holding that any of the subject land was acquired for a public purpose. It also contends the trial judge erred in finding 19 hectares as the area required for a public purpose and in not identifying the land so required and quashing the declaration in so far as it applied to the balance.

The most relevant parts of the reasoning of the learned trial judge are as follows:

“It is obvious that both the Claimant and the Defendant are talking to private investors about carrying on investment on the land.

There is evidence to show that the Claimant is ready to develop the land together with the Solomon Islands Government.

Evidence shows that the Wantok plan merely needs 15 hectares of the land for its project. However, the project might require additional space for accommodation for employees. This means the project would merely require 19 hectares of the land. This court is of the view that part of the land not required for development of fisheries be returned to the Claimant”.

Kim’s statement, which is unchallenged on this point, makes it clear the appellant intended developing much of the land as an on shore fisheries base and had been negotiating with Korean investors to become involved. At least some of the Korean investors involved in negotiations with the appellant are now the developers who will benefit from the compulsory acquisition.

In the letter dated 29 May 2012 from the respondent Attorney General to the legal representative of the appellant the following relevant statement is made:

“Wantok Project”. It involves the Solomon Islands Government, Korean Government, Aid Agencies and a consortium of Korean Investors. The total investment value by the investors is substantial at approximately USD $100 million.

The Solomon Islands Government is specifically asked to make a substantial investment in the Wantok Project through the provision of infrastructure, various concessions...”

In the sworn statement of Dr. Ramofafia, the Permanent Secretary of the Ministry of Fisheries and Marine Resources, the following statement is made:

“In response to the representation by the Government, the Republic of Korea, sometime in 2006 approached the Government and made representation that Korea is willing to invest in Solomon Islands and requested that the government provide land for the investment”.

As stated by Dr. Remofafia the Korean Government funded a feasibility study on the project and a copy is C.R.11 to his statement. Relevantly that study includes the following:

Investment will be a joint investment by Dongwon Industries, Silla Co., Sajó Industries and Hansung Enterprise, with Dongwon holding a 53.6% stake, Silla holding a 21.4% stake, Sajo holding a 21.4% stake and Hansung holding a 3.6% stake.

It is implicit in the respondent’s material that the subject land was resumed for the Wantok Project and that the main contribution of the Solomon Islands Government would be the provision of the land required for the necessary infrastructure. The ultimate commercial benefit would be for the four investors though the project would create a significant number of jobs for Solomon Islanders.

“(1) No property of any description shall be compulsorily taken possession of and no interest in or right over property of any description shall be compulsorily acquired, except where the following conditions are satisfied, that is to say:

Then section 71(1) of the Act provides that land may be acquired compulsorily whenever it appears to the Minister of Lands that land is required for “any public purpose”. The procedure is that the Minister publishes in the gazette a declaration to that effect. The declaration must state “the general nature of the public purposes” for which the land is required. Section 76 gives any person having an interest in the land six months within which to apply to the High Court for an order quashing the declaration if it considers “the purpose referred to in the declaration is not a public purpose”. The High Court can also make such a declaration in respect of land not required for the stated public purpose.

The expression “development or utilisation of any property in such a manner as to promote the public benefit” is very broad, but it must be interpreted in the context of s. 8(1) (a) as a whole. Clearly, the concept of “public purpose” underlies the whole of the constitutional provision and the primary justification for the compulsory acquisition must be a public purpose. Some long term indirect benefit to the public would not ordinarily justify compulsory acquisition.

The expression “public purpose “used in the Act is not defined in any legislation.

There does not appear to be any single accepted definition of “public purpose”. In general terms it must be something for the direct general benefit of the community such as the provision of a service by the Government. It would not be sufficient that there was, for example, an indirect benefit to the community through an increase in government revenue from a commercial activity or an increase in employment. As Chetwynd J said in Talasasa v Attorney General (2012) SBHC 85 in holding a resumption was not for a public purpose:

“Conversely, a private purpose which has some laudable elements and which would no doubt benefit the locality with increased work opportunities and increased income, does not transmute to a public purpose because of those laudable elements and benefits. The purpose of the acquisition of the land was to assist a purely private commercial concern to acquire the land it needed for the development of a resort.

There are numerous authorities in which Courts have stated that a strict construction will always be placed on statutes and notices thereunder providing for compulsory acquisition of private property. The power to compulsorily acquire will always be scrutinized to see that it is not abused.

In his oral submission counsel for the Attorney General conceded that the government was not finally committed to the plan referred to in the sworn statement of Dr. Ramofafia. It was said that exhibit CR11 was still only a feasibility study. Further, counsel conceded that only 15 hectares was required for the plan as presently envisaged.

It seems clear that the land resumed would be largely used to provide private commercial investors security for their investment. At best on the present material (and it is not clear this is factual rather than an aspiration expressed in submission) the Solomon Islands Government would only retain ownership of a small portion of the land on which port facilities were constructed.

The expression “purpose of developing fisheries” is extremely vague and perfectly consistent with a proposal that the development be undertaken by and for the immediate benefit of private investors. The material in CR11 suggests that would be the intention here. Significantly that was the very purpose the appellant intended to use the land for. It had put forward such a proposal to the government and its proposal would also have included some of the investors in the proposal outlined in CR11.

Counsel for the appellant conceded that some specific proposal for the development of fisheries could constitute a public purpose, but the appellant’s case was that the intended purpose here was primarily to benefit the investors and therefore it was not a public purpose. The respondent’s submissions have not shown the purpose to be otherwise.

Two further, but minor, points should be made. Firstly, there was no justification at all, as was conceded by the respondent, for the judge at first instance increasing the area from 15 to 19 hectares because of the possible need for more residential space. Secondly, it was not sufficient merely to say that 30 hectares should be returned to the appellant; it was necessary to make a formal order quashing the notice of acquisition to that extent.

Court of Appeal of Solomon Islands

Korean Enterprises Ltd v Attorney General [2014] SBCA 4; SICOA-CAC 12 of 2013 (9 May 2014)