Success Co Ltd v Chago [2025] SBCA 3; SICOA-CAC 30 of 2023 (11 April 2025)

IN THE SOLOMON ISLANDS COURT OF APPEAL

Case name:	Success Co Ltd v Chago
Citation:
Decision date:	11 April 2025
Nature of Jurisdiction	Appeal from Judgment of The High Court of Solomon Islands (Faukona DCJ)
Court File Number(s):	30 of 2023
Parties:	Success Company Limited v Mario Chago and Andrew Tura, Komarindi Resources Limited
Hearing date(s):	27 May 2024
Place of delivery:
Judge(s):	Justice Palmer CJ Justice Gavara-Nanu JA Justice Lawry JA
Representation:	G. Suri for the Appellant J. Sullivan KC and S Lepe for the First Respondent
Catchwords:
Words and phrases:
Legislation cited:	Solomon Islands Courts (Civil Procedure) Rule, r 12.11 and 12.12, Land and Titles Act S 61 (1)
Cases cited:	Quarter Enterprises Pty Ltd v Allardyce Lumber Company Ltd [2009] SBCA 15, Attorney-General v. Jui Hui Chan [2017] SBCA 5, Natei v. HD Development Ltd [2023] SBCA 25, Australian Coal & Shale Employees Federation v Commonwealth [1953] HCA 25; [1953] 94 CLR 621, Ministry of Environment, Climate Change, Disaster Management and Meterology v. Eke [2023] SBCA 26, Honiara Resort (Solomons) Limited v Commissioner of Lands [2022] SBCA 12,
ExTempore/Reserved:	Reserved
Allowed/Dismissed:	Dismissed
Pages:	1-19

JUDGMENT OF THE COURT

1. This matter comes before the Court as an appeal from the judgment of Justice Faukona, Deputy Chief Justice, issued on 3^rd August 2023, in which he dismissed the Appellant's application under Rules 12.11 and 12.12 of the Solomon Islands Court (Civil Procedure) Rules 2007 (“the CP Rules”) to determine ten issues as preliminary issues of law.
2. The primary judge concluded, after careful consideration, that the factual matrix out of which these issues arise was in serious dispute and that such disputes required resolution through a full trial, rather than by way of preliminary determination of issues of law.
3. In essence, the Appellant seeks to appeal the exercise of discretion by the primary judge, arguing for the determination of mixed issues of law and fact before trial. However, it must be noted that the exercise of discretion under Rules 12.11 and 12.12 is predicated on whether a preliminary finding could resolve the matter or lessen the cost of proceedings.

Rules 12.11 and 12.12

4. Rules 12.11 and 12.12 of the CP Rules provide as follows:
   • “Preliminary issues
   • 12.11 The court may hear legal argument on preliminary issues of fact or law between the parties if it appears likely that, if the issues are resolved, the proceeding or part of the proceeding will be resolved without a trial, or the costs of the proceedings or the issues in dispute are likely to be substantially reduced.
   • Hearing of question of law only
   • 12.12 If the parties have agreed on the facts but there remains a question of law in dispute, the court may hear argument from the parties about the question of law.”
5. There are two parts to these rules. The first, rule 12.11, pertains to the hearing of issues of fact and law, but which is dependent on the likelihood that if the issues are resolved, the proceedings or part of the proceedings will be resolved without a trial, or the costs of the proceedings or the issues in dispute are likely to be substantially reduced.
6. The second part, rule 12.12 is predicated on agreement of the facts for the questions of law to be determined.

Brief Background to the Appeal.

7. The Claim filed in the High Court on 20 June 2019 by the first and second Respondents (first and second Claimants in the High Court) essentially is for permanent injunction to prohibit the Appellant (first Defendant) and second Defendant (Solomon Resources Management Ltd), from entering the Perpetual Estate in Parcel Number 203-003-1 (“the Land”), and conducting felling and logging operations of timber within that Land.
8. They seek consequential orders for damages for trespass and conversion including exemplary and or aggravated damages.
9. They claim that they are the title holders to the perpetual estate in parcel no. 203-003-1 at Komarindi, West Guadalcanal, comprising of about 18,840 hectares of land (“the Land”). They say they are the surviving joint owners of that registered land.
10. The second Claimant is an incorporated company in Solomon Islands, carries on the business of logging, the holder of a registered profit over the Land, and the holder also of a Felling Licence no. A101837 over the said land.
11. The first and second Defendants are both logging companies, owned by a common shareholder and Director, Heinz Bodo Dettke.
12. The Claimants assert that both defendants do not hold any valid felling licence over the Land or any part thereof.
13. This dispute has arisen as a result of logging activities carried out by the Defendants over the Land since about April 2019. Despite repeated requests to stop, including letters written by the Commissioner of Forest Resources and Solicitors of the Claimants, they had not complied.

Summary of the Defence and Counter-Claim.

14. In their Defence and Counter-Claim the Defendants have challenged the validity of the registration of the Claimants on the grounds of fraud and or mistake. In essence seeking orders to invalidate their title and subsequent agreements entered into over the Land.

Application for Preliminary Determination of Legal Issues – Rules 12.11 and 12.12 of the CP Rules.

15. In seeking to assert their defence and counter-claim, they have filed an application for determination of preliminary legal issues, which they say could resolve the dispute quicker and with less cost.
16. In their Amended Application for preliminary Determination of Legal Issues ten legal issues were raised for determination by the court.
17. The Application required the Deputy Chief Justice who had carriage of the matter to determine whether those questions should be determined as preliminary issues of law or whether they should go to trial.
18. In his determination, the learned primary judge held that there were issues raised that warranted the matters going to trial.

The Appeal.

19. In their submissions, Mr. Sullivan KC, of Counsel for the First Respondents submits that given the significant number of disputes in the factual matrix as presented, the primary judge's determination not to resolve those issues in isolation was both reasonable and appropriate.
20. The application in the High Court involved requesting declarations on ten issues, of which issues 1-7 were dismissed by the primary judge without objection from the Appellant. It follows that the failure to appeal on those initial issues constitutes an implicit concession on the part of the Appellant regarding the necessity of a trial. Counsel submits that this concession highlights that the factual disputes interwoven throughout the Appellant's case must be resolved before any legal determinations can be conclusively made.
21. The Appellant's case in this appeal is primarily a challenge to the title of the first and second Respondents with respect to the Komarindi land, and asserts that there was no trespass due to alleged errors in the land acquisition process under the Land and Titles Act. However, the Appellant does not assert any positive interest in the land itself nor does it allege any other legal right to enter the land, resulting in a purely negative assertion of defence that has further implications for its standing.
22. Issues 8-10, which are the focus of this appeal, inherently rely on the resolution of disputed facts that cannot be appropriately adjudicated without a trial.

The Exercise of Discretion

23. It is important to appreciate that the issue in this case is about the correct exercise of the discretion of the primary Judge.
24. The appellant's application under rr.12.11 and 12.12 required the primary judge to determine whether the proposed issues should be set down for hearing at a later date or left to be resolved at trial.
25. In their submissions on this appeal, Mr. Sullivan of Counsel for the Respondents points out that there is a two-step process for the Court to exercise its discretion whether or not to determine the question of fact or law as a preliminary issue.
26. He cited the statements of this Court in Jui Hui Chan^[1] where the scope and operation of rule 12.11 has been commented on by this Court as follows:
    • “31 This can be a useful mechanism for early resolution of proceedings without incurring the financial and other costs of a full trial. However, the question for determination must be carefully framed and recorded. If it is a question of law, it may not be possible for it to be determined in advance of the determination of relevant facts. If it is a mixed question of fact and law, it may not be possible for it to be determined as a preliminary question.
    • 32. Usually an application for the determination of a preliminary question should be filed and decided before argument on that preliminary question proceeds. Once an order for the determination of the preliminary question has been obtained, and, in the usual case, a date for the hearing of that preliminary question has been set, the parties can make their submissions on it. Those submissions should be strictly confined to the point in issue. The hearing of the preliminary question should not go beyond the preliminary question, and the court's decision should be confined to answering that preliminary question.

33. In the present case, the scope of the preliminary question was narrow. It really asked no more than whether the respondent was "a valuer ...undertaking valuation practice" within the meaning of s 39(1) on 27 September 2012. The answer to that question was never in dispute; it was always accepted that he was such a person.

34. Unfortunately, the parties' submissions went far beyond the preliminary question, and his Lordship purported to determine issues which were not properly before him. Further, the formal judgment issued on 12 October 2016 was not responsive to the preliminary question before his Lordship.”

27. Learned Counsel points out that if the facts are in dispute, it is most unlikely that a trial can be avoided or costs reduced. Only if the discretion is exercised in favour of proceeding by way of preliminary issue(s), will that issue or issues be set down for a further hearing and argument.
28. However, where the parties agree on a precise preliminary question of law to be determined, the Court may determine that question on the uncontested evidence before it, as in Natei's case^[2]. In this case however, learned Counsel points out that the evidence is contested at almost every juncture thus obviating the potential operation of r. 12.11, and the principle in Natei cannot apply.
29. Mr. Sullivan points out that the judgment under appeal was the first step in the r. 12.11 process envisaged in Hui Jui Chan, i.e., whether to set the matter down for a hearing of preliminary issues, or to send the proceedings to trial. That this was the application before the Court, and not the actual determination of the proposed issues, is plain from relevant order referred to in the Notice of Appeal, which set the application down for hearing unless the parties "otherwise agree by consent order”.^[3]
30. It is also clear from the formal order under appeal that the judge thought that was exactly what he was doing: "the application to deal with issues of fact and law at the preliminary stage is hereby dismissed in its totality"^[4].
31. In short, in the exercise of his discretion, the primary judge decided not to determine preliminary questions of fact and/or law but to send the case to trial.
32. We concur with the submissions of learned Counsel on this point.

The Appellate Court’s Role in Challenges to the Discretion.

33. The role of an appellate court in reviewing the exercise of a discretionary power has been clearly articulated by this Court on more than one occasion. The applicable principles are well settled.
34. In Quarter Enterprises Pty Ltd v Allardyce Lumber Company Ltd [2009] SBCA 15, this Court adopted with approval the reasoning of Kitto J in the High Court of Australia (emphasis added):
    • "The true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong.
    • A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance."
    • (Australian Coal & Shale Employees Federation v Commonwealth [1953] HCA 25; [1953] 94 CLR 621 at 627)
35. Similarly, in Eke^[5], this Court reaffirmed the principles governing appellate review of discretionary decisions (emphasis added):
    • “It is an established principle of law that an appellate court cannot disturb the decision [being the exercise of a discretionary power] of the primary court unless the primary court had applied wrong principles or fallen into error by not considering matters it should have considered or considered matters it should not have considered. And that, such errors have amounted to substantial miscarriage of justice. Alternatively, although an error may not be obvious from the decision appealed, the resulting decision is unreasonable or plainly unjust, that an error can be inferred.These principles were succinctly stated in by the High Court of Australia in House v. King... The Court said.

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

36. Thus, in order for an appellate court to interfere with a discretionary decision, the appellant must demonstrate that the primary judge:
    1. acted on a wrong principle;
    2. considered irrelevant matters;
    100. failed to consider relevant matters;
    4. made a mistake of fact resulting in a substantial miscarriage of justice; or
    5. reached a decision that was unreasonable or plainly unjust.
37. The appellant, whether in the Notice of Appeal or in its submissions, does not challenge the primary judge’s discretionary determination to remit the matter to trial. No error is alleged under any of the accepted grounds outlined above. Rather, the appellant seeks to argue legal issues which would arise only at the second stage of the r. 12.11 process — a stage that was never reached due to the primary judge’s decision not to proceed by way of preliminary issue.
38. A fair reading of the primary judge’s detailed reasons confirms that there is no basis for appellate intervention. The pleadings disclose substantial disputes on nearly every material aspect of the underlying factual matrix. Until those disputes are resolved at trial on the evidence, it is premature to determine what legal issues will arise for adjudication. Nothing in the appellant’s submissions demonstrates that proceeding by way of preliminary issue would narrow or avoid the factual disputes, reduce the issues at trial, or result in cost savings — the very purpose for which r. 12.11 is invoked.
39. That alone is sufficient to dispose of the appeal. For completeness, however, the Court briefly addresses the three grounds of appeal herewith.

Ground 1

40. Ground 1 relates to Issue 8 before the primary judge, namely the appellant’s allegation that the land acquired for hydro-electric purposes has been repurposed for logging, thereby amounting to a change of the purpose of the acquisition.

Appellants Submissions – brief summary.

41. The Appellant alleges in essence under this ground that there has been an error on the Purpose of Land Acquisition and Registration. Mr. Suri of Counsel for the Appellant submits, that the land in question (PE – Parcel Number 203-003-001), was originally acquired solely for the public purpose of hydroelectric development and that a subsequent change of use to logging effectively altered that purpose and consequently resulted in the invalidation of the land acquisition process under section 61(1) of the Land and Titles Act, ultimately rendering the registration of the Land null and void.
42. In brief, Counsel submits that:
    • The “wish” of the Commissioner of Lands as to the public purpose must be consistent from acquisition to registration.
    • Key statutory steps, including the granting of a lease to the Commissioner and proper execution of a vesting order, which were required to be performed were either incomplete or omitted.
    • The process was effectively terminated when the land was granted directly to private parties for logging rather than to the Commissioner for hydro purposes.
    • This change of use occurred before completion of the acquisition process and was confirmed by the Commissioner’s letter of 23 March 2018 stating the hydro project would not proceed.
    • Therefore, the land remained customary land, and the initial registration was invalid, citing this Court’s reasoning in SMM Solomon Ltd and Others v. Axiom KB Ltd and Others^[6], at paragraph 32.
43. In SMM Solomon Ltd, this Court said:
    • “323. The result is that, when the land has been sold, the perpetual estate must be vested in the Commissioner of Lands and, when it has been leased, the perpetual estate will be vested in the landowners' representatives and a lease executed by them in favour of the Commissioner of Lands on behalf of the Government or the Provincial Assembly. Clearly if any further lease is to be made with the outside body which wishes to have rights of access to the land, it will be executed by the Commissioner of Lands or Provincial Assembly and the body seeking access." (Emphasis added).
44. That allegation, however, is presently no more than an assertion. It is plainly in dispute on the pleadings and cannot be resolved without a trial of the evidence. The dispute may be summarised as follows:
    1. The appellant pleads^[7] that there was a change of purpose;
    2. The respondents however deny this and plead that the 2015 agreements were varied by consent to defer, but not cancel, the hydro-electric project — including: (i) giving priority to the Tina River project; (ii) continuing land survey and registration efforts; and (iii) allowing felling of timber (previously restricted) upon completion of the registration^[8];
    100. The respondents further plead that this position is confirmed by a letter from the Commissioner dated 18 March 2018^[9];
    4. The appellant, for its part, denies any 2015 variation and asserts that the Commissioner’s letter of 18 March 2018 constitutes a repudiation of the earlier agreements, a cancellation of the project, and a change of purpose^[10].
45. Whether there was in fact a change of purpose, repudiation of agreements, or cancellation of the hydro-electric project is a matter wholly dependent on factual findings to be made at trial. The proper construction of the Commissioner’s letter — which is equivocal on its face — must be informed by the evidence, including that of the respondents, the appellant (if any is forthcoming), and relevant Crown officers. The determination of any legal issue arising from these events cannot be undertaken until the necessary factual foundation has been laid at trial.
46. Moreover, the appellant’s submissions suggest that the alleged change of purpose arose not from the purported 2015 variation, but only after registration of the First Respondents as owners of the perpetual estate, by reason of the Commissioner’s 2018 letter. As the primary judge correctly noted, the legal effect of any such post-registration change will depend not only on findings of fact but also on how the pleadings and evidence develop.
47. If, at trial, the respondents succeed on Issues 1 through 7 — or on a sufficient combination thereof — and establish that any alleged change of purpose occurred only after the Appellants’ registration as owners of the perpetual estate, then the inescapable conclusion is that such registration was valid at the time it occurred. That conclusion is compelled even if, for argument’s sake, there was a subsequent change of purpose.
48. That might give rise to a further legal issue — not pleaded or argued by the appellant — namely whether a valid registration can later be invalidated by a change of purpose occurring post-registration. However, that is a matter which could only arise once factual findings are made at trial. It is premature and inappropriate to speculate on such an issue in the abstract.
49. In analogous circumstances, this Court has declined to entertain preliminary legal issues in the absence of established facts. In Honiara Resort (Solomons) Limited v Commissioner of Lands [2022] SBCA 12, a case stated by the High Court was rejected on the basis that it rested upon agreed factual assumptions rather than judicial findings. The same principle applies with greater force here, where the assumptions are not even agreed but are advanced by only one party.
50. We are satisfied the Appellant’s reliance on SMM case is misplaced. That case turned on fundamental defects in the adjudication and registration process, not on whether a valid registration could be invalidated by a subsequent change of purpose. The factual foundation in SMM was not in dispute. Moreover, any dicta suggesting otherwise are taken out of context and have no bearing on the present appeal.
51. In the circumstances we are satisfied, Ground 1 must therefore fail.

Grounds 2 and 3
Ground 2 – Validity of Grant of Profit

52. The Appellant argues that the grant of a timber profit to the Second Respondent by the initial registered proprietors (including the First Respondents) was unlawful because:
    • The legitimacy of the profit grant depends on the validity of the land registration, which is disputed.
    • The trustees who granted the profit were only empowered to act for hydroelectric purposes, not logging.
    • The grant of profit bypassed the statutory process under Part III of the Forest Resources and Timber Utilisation Act, which requires a Timber Rights Hearing to protect the rights of customary landowners.
    • Tribes including Kakau and Lakuili were adversely affected and were not consulted or included in the consent process. Legal proceedings initiated by those tribes highlight the impact of the alleged unlawful change in purpose.

Ground 3 – Validity of Felling Licence No. A101837

53. The Appellant further contends that the felling licence issued over PN. 203-003-001 was invalid because:
    • It was issued based on the disputed grant of profit, not a Standard Logging Agreement.
    • If the land remains customary land (as asserted), then the requirements under Part III of the Forest Resources and Timber Utilisation Act were not complied with.
    • The licence therefore has no legal effect, as it was issued without compliance with the applicable statutory framework and on the basis of an invalid land registration.

Determination Regarding Grounds 2 and 3.

54. Grounds 2 and 3 are expressly dependent on the success of Ground 1. As Ground 1 fails for the reasons set out above, so too must these grounds. In each case, the appellant challenges the validity of the profit licence and/or the felling licence on the basis that the relevant land — Komarindi — remains customary land. That contention can only be established following a trial, with appropriate findings of fact and legal conclusions drawn therefrom.
55. We note that unless the contrary intention appears, the maxim of law “Omnia praesumuntur rite et solemniter esse acta” – “all things are presumed to be correctly and solemnly done”, would apply on all fours to the circumstances of this case. In this instance, until the claim has been heard and concluded, and succeeds, the rules of interpretation that all actions of Government Officers are presumed to have been validly done unless otherwise set aside by the Court applies.
56. It is trite that the existence of other litigation involving similar or overlapping issues is irrelevant to the disposition of this appeal. The appeal must be determined on its own merits and in accordance with the established legal principles governing appellate intervention in the exercise of a discretionary power.

Conclusion

57. The appeal must be dismissed for the following reasons:
    • (i) It is incompetent, as it does not challenge the exercise of discretion by the primary judge, which was the true subject of the decision at first instance. Rather, it seeks to argue legal propositions premised upon disputed facts, as though those facts had already been determined in its favour;
    • (ii) No submission or ground of appeal has been advanced that could demonstrate error in the exercise of the primary judge’s discretion under r. 12.11;
    • (iii) A proper reading of the judgment confirms that the discretion was exercised in accordance with established principles. The only conclusion reasonably open on the material before the primary judge was that the matter should proceed to trial.
58. We are satisfied, the primary judge, after careful deliberation, exercised his discretion in favour of proceeding to trial. He did not purport to make any final determination on the legal issues in dispute.
59. The appellant, instead of challenging the exercise of discretion itself, has sought to advance arguments that would only become relevant if the disputed facts, as pleaded, were ultimately determined in its favour. However, as the pleadings involve mixed issues of law and fact, these issues cannot be properly resolved without a full trial. That seems to be fairly obvious.
60. The primary judge appropriately considered the fact that the underlying factual matrix remained in dispute. He was also mindful that if the legal issues raised by the appellant did indeed arise, the resolution of factual matters at trial could further refine their scope and application.
61. We are satisfied the reasoning of the primary judge is clear from his conclusion that:
    • "All in all, all the issues of fact and law to determine at preliminary stage cannot resolve this case at this stage but require trial so that evidence can be call to substantiate the facts that were pleaded."^[11]
62. This Court finds that the learned judge correctly appreciated the discretionary nature of his decision under rr.12.11 and 12.12. His conclusion was not only open to him but was also appropriate given the unresolved factual disputes at hand. The learned judge was correct in recognizing, that these issues are inextricably linked to factual determinations that must be made through the presentation of evidence at trial. Accordingly, the exercise of discretion to send the matter to trial was not only justified but necessitated by the complexities of the case.
63. We are satisfied no error in the exercise of his discretion has been demonstrated.
64. The appeal is dismissed with costs, including costs of the proceedings at first instance. Certification for King’s Counsel is granted.
65. The matter is remitted to the High Court for directions to bring the proceedings to trial in the ordinary course.

Orders of the Court:

1. The appeal is dismissed.
2. The Appellant shall pay the costs of the Respondents, including costs incurred at first instance with Certification for King’s Counsel.
3. The matter is remitted to the High Court for further directions to bring the proceedings to trial in the ordinary course.

Palmer (CJ)
Gavara-Nanu (JA)
Lawry (JA)

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^[1] Attorney-General v. Jui Hui Chan [2017] SBCA 5 (Goldsbrough P., Ward and Wilson JJA)
^[2] Natei v. HD Development Ltd [2023] SBCA 25 where the sole issue related to adverse possession by prescription under ss. 224 and 225 of the Act and the relevant facts were uncontested – at [37], [39], [49] – [52]
^[3] See Order 27.10.22 at [4], Appeal Book [442].
^[4] See Order 03.08.2023 at [1]. Appeal Book [443]
^[5] Ministry of Environment, Climate Change, Disaster Management and Meterology v. Eke [2023] SBCA 26
^[6] CAC 34 of 2014.
^[7] See Amended Defence and Counterclaim at [1.2] and [16]. AB[9] and [12]
^[8] Reply and Answer [6] [29-30]. AB[15] and [18]
^[9] Reply and Answer [39]. AB[19]
^[10] Reply to Answer [8] and [10]. AB[28-29]
^[11] See 17, paragraph 136 of the judgment in Mario Chago and Andrew Tura and Another v. Success Company Ltd and Another CC 366 of 2019, (3^rd August 2023).