Tung Shing Development Ltd v Yim Kwok [1995] SBHC 11; HC-CC 066 of 1995 (18 April 1995)

HIGH COURT OF SOLOMON ISLANDS

(Civil Case No. 66 of 1995)

TUNG SHING DEVELOPMENT LIMITED

-v-

YIM KWOK, JOHN GARO AND JUSTIN AGOFI TRADING AS JAY WILLIAMS EXPORTERS AND AFEALA MILLING LIMITED

Before: Palmer J.

Hearing: 13/4/95
Ruling: 18/4/95

A. Radclyffe for Plaintiff
Ms. J. Corrin for Defendants

(PALMER J): By Order dated the 6th of March, 1995 it was ordered at paragraph (a):

"that the proceeds of sale of the logs at Fe'efata log pond, West Kwaio, Malaita Province less any expenses approved by the Court be paid to the High Court and placed in an interest bearing account".

In the ruling of this Court on the 7th of April, 1995, the remaining paragraphs of the Order dated 6th March, 1995 were discharged, save that above paragraph.

The Defendants now apply by summons filed on the 10th of April, 1995 pursuant to that order, for approval of a number of expenses.

The first amount for approval as set out under paragraph 3 of the affidavit in support of William Arthur Dyer, filed on the 11th of April 1995, is the sum of USD87,917.20 payable to Dalgro Solomons Ltd. The amount claimed, is as set out in paragraph 4 of the same affidavit of William Arthur Dyer for:

"...all the loading services at the road ponds and all transportation to the out loading ponds".

A copy of that contract is marked exhibit "WD2" in the same affidavit of William Arthur Dyer. That Contract was accepted and executed on the 26th of January, 1995 between Sumisho Lumber Trading Co., Ltd and Afeala Milling Ltd.

Having heard the submissions in opposition of Mr. Radclyffe on this point, I am satisfied that this is a genuine claim, properly incurred in the operations associated with the felling, extraction and exporting of those logs; which had been the subject of the Courts order at the Fe'efata log pond at West Kwaio.

I am aware that the Afeala Milling Limited was not a party to the Agreement between the Plaintiff and the First defendant, and that maybe the Second Defendant's actions in signing the Purchase Agreement with Sumisho Lumber Trading Co., Ltd was in breach of the JV Contract. There is no evidence before me however to show that the Plaintiff did not approve of that Purchase Agreement or that they took any actions to stop the Second Defendant from executing it. There is also no evidence from the Plaintiff of any alternative arrangements in which it could have had those logs loaded and transported to the log pond in time for export at say a cheaper rate. There is also no evidence that the Plaintiff or the J V Company had the facilities and equipment not only for those operations but also for the road maintenance, which would have been essential for the safe and easy transporting of those logs to the log pond. In those circumstances, I am satisfied that the claim is proper and should be paid out.

The second amount claimed for approval is the sum of SBD13,502.85 to Samsons.

The telephone and facsimile bills in the statement number 54 and 34 in my view should be paid as necessary costs in any business operation. There is no evidence to show that they were not incurred in any other proper manner.

Statements number 48 and 29 however do not show clearly what they were for. At paragraph 5 of the affidavit of William Arthur Dyer, he states that they were for machines and spare parts. Those statements refer only to various invoice numbers, but no copies of those invoices have been attached for the Plaintiff's and the court's scrutiny. The details provided in my view are insufficient and accordingly at this point of time, approval should be denied. If satisfactory evidence or detail is provided at a later stage, then a fresh application may be made in respect of those same items for the Court's consideration.

The third payment claimed is the sum of SBD17,919.69 to Cruz Communications. Again there is insufficient information filed to show what the use and significance of those purchases are in the logging operations that had been carried out.

The fourth payment claimed again in my view has not been supported with sufficient details. There are various invoices issued for the month of February and March and at varying amounts, but with little detail to show what they were made for. The general description given in paragraph 6 of the affidavit of William Arthur Dyer, "... for rations required during the course of the loading operations", in my view is insufficient. For example, invoice No. 27, issued for $75.00, when was that incurred, for whom, and what was the nature of the work done at that time to justify the expense as being part and parcel of the logging operations?

For the payment claimed under item (5), again the details provided in some of the invoices are insufficient.

In the exhibit marked "invoice 456/95" attached to the affidavit of William Arthur Dyer, thirteen payments are listed. The only payments that can be released at this point of time, but subject to the filing of copies of those individual invoices, or such evidence as is available for further consideration by this Court before final approval is granted, are:

(i) Shell Pacific invoice 01-20972 for $362.70; and

(ii) Shell Pacific invoice 01-21793 for $1,518.50.

I have made a conditional acceptance of those two payments, on the basis that it is most likely that these will relate to fuel, oil or lube products, that were used in the logging operations.

In invoice marked No. 454/95, nine payments were claimed. The first payment claimed for cash advance for access and usage fee to the Fe'efata log pound for $10,000.00, needs further clarification. Who was this paid to? Once this anomaly is cleared, then it will have to be off-set with any further payments that may be due to that person or group. Approval at this stage therefore will be withheld pending clarification of that payment and such supporting evidence as to the details of that payment.

The two shell invoices numbered 01-20170 and 01-24054 for $6,996.60 and $9,756.60 respectively are again approved in the same terms already spelled out in this judgment.

The other payments claimed will need supporting information to the Courts satisfaction. That can be best done by providing copies of those individual invoices or other suitable evidence on which the Court could properly consider for approval. For example, in the fourth payment claimed in that invoice, it refers to a cash advance on the 16th of December, 1994 for $3,000.00. I note that in paragraph 7 of the affidavit of William A. Dyer, it refers to payments for management services, fuel, oil, spare parts, freight transport, machinery and plant. Unfortunately, when it comes to individual payments claimed, these must be supported with sufficient and credible evidence of what that payment was. It cannot be taken for granted by this Court, and lawyers should always be prepared to provide as much detail there is to the Court, especially in such circumstances where those payments are disputed.

In invoice number 440/94, the only payment that will be released is for invoice 504181 being payment to PKR Pacific for a pump in the sum of $758.75.

For invoice 458/95, page two, the only payments that are approved on the same terms described earlier are:

(i) Payment to Shell Pacific for $143.00, and

(ii) Payment to DUM Bandag for $1,285.00.

The payment for bull dozer hire for 3 months at $35,000.00 per month (total $105,000.00), is a justifiable expense and is approved herewith.

For invoice 458/95; page one, the only payment approved for immediate payment is for the spares for Cat D7 from Hastings Deering for $20.07.

The items also conditionally accepted, subject to the term earlier described are:

(i) Shell Pacific Invoice 01-22086: $10,530.85

(ii) Discount Auto invoice: 382.00

(iii) Shell Pacific invoice 01-22470: 12,864.36

(iv) Hastings Deering invoice 737: 188.65

Under item 5 therefore, the total amount that can be released for immediate payment is $105,778.82 ($758.75 + 105,000 + 20.07).

The next item for consideration is the payment of $10,000.00 due to Malaita Provincial Assembly for the business license of the Defendants. Without the licence from the Malaita Provincial Assembly, the operations of the Defendant would have been illegal. The licence is a vital requirement in the operations carried out by the Defendants. That claim is accordingly approved.

Finally, the royalties due to landowners in the sum of $59,555.20. Attached to the said affidavit of William A. Dyer is exhibit "WD3", a timber rights agreement which enabled the Second Defendant to fell, harvest and extract timber from the customary lands between Kwaleunga River and Fulo River in Wards 27 and 28.

There is no evidence to the contrary, that those logs were felled in any other land area. Under that agreement, the landowners or their representatives, entitled to receive royalty payments are identifiable.

The only concern at this stage is the question of how that figure was arrived at. Accordingly, the sum of $59,555.20 is approved, subject to the filing of details as to how the above sum was arrived at.

Costs in the cause.

A.R. PALMER

JUDGE