Omex Ltd v Success Company Ltd [2014] SBCA 6; SICOA-CAC 16 of 2013 (9 May 2014)

IN THE SOLOMON ISLANDS COURT OF APPEAL

NATURE OF JURISDICTION:	Appeal from Judgment of the High Court of Solomon Islands (Mwanesalua J.)
COURT FILE NUMBER:	Civil Appeal Case No. 16 of 2013 (On Appeal from High Court Civil Case No.175 of 2012)
DATE OF HEARING:	7 OCTOBER 2013
DATE OF JUDGMENT:	8 NOVEMBER 2013
THE COURT:	Justice Glen Williams JA, Acting President, Sir Gordon Ward JA, Sir John Hansen JA
PARTIES:	Omex Limited Appellant - V – Success Company Limited Respondent
Advocates: Appellants: Respondent:	C. Hapa for Appellant G. Suri for Respondent
Key words
EX TEMPORE/RESERVED:	RESERVED
ALLOWED/DISMISSED	DISMISSED
PAGES	1- 6

JUDGMENT OF THE COURT

[1] This is an application to the full Court for leave to appeal an interlocutory decision in which Mwanesalua J refused an application by the present appellant, Omex Limited (Omex) to strike out the claim for judicial review filed by the present respondent, Success Company Limited (Success). It is important to bear that fact in mind because counsel have, in both written and oral submissions, appeared to misunderstand the nature of this proceeding and attempted to visit matters which do not bear on the question of leave.

[2] The application to strike out the claim was refused by the learned judge on 18 July 2013 and leave to appeal that interlocutory decision was granted by him on the papers on 20 September 2013. The respondent then filed an application, on 14 October 2013, that the application for leave be heard by the full Court. Notice of Appeal has been filed by Omex in accordance with that grant of leave.

[3] It is helpful to set out a brief description of the case and of the proceedings so far.

[4] Both parties are in the business of logging on Guadalcanal. Success has a felling licence granted on 23 December 2010, number TIM 2/38 covering a number of areas including Ravuneha/Honiata land . It is a renewal of a licence previously held by Success, which had expired. Omex also holds a felling licence, Number A101104 which was granted on 18 August 2011. It covers land which includes two areas described as Kosumba 1 and 2. There is no dispute that Kosumba 2 is the same land as Ravuneha/Honiata land.

[5] Felling licences can only be effective if there is an approved logging agreement with the relevant landowners. When Licence TIM 2/38 was renewed the previously approved logging agreement with the landowners had expired due to an apparent change of heart of one of the named trustees withdrawing his support from Success.

[6] On 1 June 2012, Success brought a claim for judicial review and an application for extension of time. The defendants were Omex, the Commissioner of Forests, Guadalcanal Province and the Attorney General. The application sought, inter alia, a declaration that Omex's licence was invalid and void because Success's licence was first in time and there cannot be two licences over the same land, and a quashing order over the decision of the Commissioner of Forests to include Kosumba 2 in the later licence issued to Omex.

[7] On 16 July 2012, the parties appeared before Mwanesalua J on Success's application for further orders. On 27 July 2012 the learned judge granted an extension of time, gave leave to amend the claim within three days and set the time within which defences were to be filed. The amended claim was filed on 30 July 2012, a directions hearing held on 16 August 2012 and a defence and counterclaim filed on 3 September 2012.

[8] All these steps were followed, on 25 September 2012, by the application by Omex to strike out the amended claim on the grounds that it:

"(a) discloses no reasonable cause of action, and/or

(b) constitutes an abuse of process

and therefore should be dismissed on the ground that the felling licence issued to [Success] numbered TIM 2/38 and effective from 23 December 2010 until 23 December 2015 is null and void"

The application then lists a number of points of fact and law in support of that contention.

[9] Lengthy written submissions were filed in the application and, in a written ruling dated 18 July 2013, Mwanesalua J dismissed the application to strike with costs on an indemnity basis. The judgment concluded:

"There are triable issues disclosed requiring determination at the end of the trial. The most important of them concerns the issue of two Felling licences being issued over the land in dispute."

[10] On 1 August 2013, Omex applied for leave to appeal Mwanesalua J's ruling and the registrar sent the file to Mwanesalua J as duty judge for consideration on the papers. On 20 September 2013, the judge granted leave. Unfortunately, it appears that was not conveyed to the other parties as required by rule 18 (2) and there was correspondence with the deputy registrar about it.

[11] On 14 October 2013, Success, having obtained a copy, applied under rule 18(3) of the Court of Appeal to have

"... the determination on paper by Honourable Mwanesalua J on 20 September 2013 granting leave to the respondent to lodge Notice of Appeal on 4 October 2013 to be heard and determined by the full Court".

[12] It was accompanied by grounds alleging Omex had failed to follow the proper procedures in its application for leave and that the learned judge's decision granting leave was flawed.

[13] That misunderstands the purpose of rule 18(3) which provides:

"A party aggrieved by the determination of the judge may by notice of application filed within seven days of the service of the notification under paragraph (2) upon him apply to have the matter heard and determined by the full court."

[14] Rule 21 prescribes that the hearing shall be by way of rehearing. The "matter", referred to in sub rule (3) is the application for leave. It is not, as the wording of the application for leave to appeal appears to suggest, an appeal from the judge's decision to grant leave. It is an opportunity for both parties to put their case anew in respect of the application for leave to appeal. The appeal, it must be borne in mind, is that against the refusal by Mwanesalua J on 18 July 2013 to strike out the amended application for judicial review.

[15] We do not need to determine the various grounds of objection filed by Success to the manner in which Omex made its application or to the manner in which the judge decided to grant leave. The Court's role at this stage is to consider whether Omex should have leave to appeal the decision of 18 July 2013. That does not include a consideration of Mwanesalua J's decision to grant leave. As required by rule 21, this Court is hearing the matter by way of a rehearing of the arguments for and against granting leave to appeal the decision of 18 July 2013.

[16] In that judgment, the learned judge set out the claims of the opposing parties as shown on the pleadings. We do not repeat them but both parties raised issues of the validity of the two licences, the overlapping claims to the same land and the issue of trespass possibly arising from those decisions. The admission by Success that their approved agreement with the landowners was not valid at the time licence TIM 2/38 was renewed, was not referred to specifically by the judge but must necessitate consideration of the effect on validity of the renewed licence.

[17] The judge concluded:

"The claimant's grounds for opposing the application to strike out are inter alia; the proceeding was allowed to proceed by the court by a ruling on 27 July 2012. The claimant filed the Amended claim for judicial review on 30 July 2012. This was because the court was satisfied that there was a triable issue. That is to say, "that two licences were issued over the land in dispute.

In the course of the perusal of the materials and the submissions filed by [Omex] and [Success] regarding this application, the court is of the view that there are triable issues disclosed requiring determination at the end of the trial. The most important of them concerns the issue of two Felling licences being issued over the land in dispute."

[18] The powers of the court to strike out a claim are provided by rule 9.75:

"Frivolous and vexatious proceedings

9.75 If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceeding:

(a) the proceedings are frivolous or vexatious; or

(b) no reasonable cause of action is disclosed; or

(c) the proceedings are an abuse of the process of the court;

the court may, on the application of a party or on its own initiative, order that the proceedings be dismissed generally or in relation to that claim."

[19] Although Omex brought its application to strike under (b) and (c), it is clear that their claim was based on (b) and any suggestion under (c) arose only if the application under the previous paragraph was accepted.

[20] Rule 9.75 largely preserves the wording of the previous Rules and of the English Rules of the Supreme Court upon which they were based and it would appear that they retain a similar meaning. Clearly the earlier authorities as to their application are, therefore, still apposite.

[21] Under the previous Rules it had long been accepted that the summary procedure of striking out should only be used in plain and obvious cases (Hubbuck v Wilkinson[1899] 1QB 86). It is not suitable for cases requiring a minute and protracted examination of the facts in order to determine whether the plaintiff had a good claim (Wenlock v Moloney [1965] 2 All ER 871). We accept that remains the proper approach under rule 9.75.

[22] Whenever the pleadings fail to disclose a reasonable cause of action or are frivolous or vexatious or an abuse of process, it is essential that there is a process to strike them out. However, the process under rule 9.75 is a summary process and should only be resorted to in cases where the issues are straightforward and can be demonstrated without recourse to lengthy, detailed or complex submissions. Where, in an application under that rule, such submissions are made as in the present case, the court should refuse the application and order that the trial proceed.

[23] Both counsel before us tried valiantly to argue their clients' case. In his submissions, counsel for Omex, Mr Hapa, complained that the judge failed, or failed sufficiently, to take note of the admitted fact that the previous approved agreement was no longer extant when TIM 2/38 was renewed. That, he submitted, meant the licence was invalid and so Omex's licence A101104 was properly issued. In reply Mr Suri for Success pointed out that his licence had not been cancelled by the Commissioner and, until it was, must be accepted as valid. In that case Omex's licence should not have been issued for the same land or at all and was, therefore, invalid.

[24] In presenting their submissions both counsel appeared to overlook the limited remedies sought by Success in the original application for judicial review; effectively two declarations and a quashing order. Instead, both counsel suggested the Court should consider other possible consequential issues such as trespass and the need for an order to allow removal of the logs already felled. Their major difficulty was that, the more they urged their cases, the more clearly it demonstrated that it was not a plain and simple case. It equally demonstrated that the learned judge was correct in refusing the application to strike it out and ordering that the issues be tried.

[25] We note that Omex's written submissions before Mwanesalua J raised these and other issues of fact and law. A moment's thought as to the nature of strike out applications under rule 9.75 should have shown him that the case was not suitable for summary determination.

[26] The result of this attempt to appeal the judgment has achieved nothing more than unnecessary delay for the parties and the landowners. He has failed to demonstrate that the decision of Mwanesalua J dismissing the strike out application was wrong or that it gives him a reasonable ground of appeal.

[27] Omex's application for leave and the draft grounds of appeal also challenge the judge's order that the application to strike be dismissed with indemnity costs. There was some uncertainty between counsels whether costs on an indemnity basis had been sought or challenged before the judge. We note that there is no reference in the judgment to the reasons for awarding them as opposed to standard basis costs.

[28] Rule 24.10 provides that costs are normally to be awarded on the standard basis unless the court orders they be awarded on an indemnity basis. The circumstances in which costs are ordered on an indemnity basis are set out in rules 24.11 and 24.12. When they are so ordered, it is important that the judge states his reason for making that order.

[29] However, we do not consider that the challenge to the costs order provides sufficient ground alone for leave to appeal.

[30] We find the decision of Mwanesalua J refusing to strike out the claim and directing that the issues should be tried was correct. The application for leave to appeal is refused with costs on the standard basis.

Order
The application for leave to appeal the decision of Mwanesalua J made on 19 July 2013 is dismissed with costs.

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Williams JA
President (Ag) of the Court of Appeal

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Hansen JA
Member of the Court of Appeal

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Ward JA
Member of the Court of Appeal