Guadalcanal Resources Development Co Ltd v Dalsol Ltd [1996] SBHC 62; HC-CC 102 of 1996 & 122 of 1996 (4 November 1996)

HIGH COURT OF THE SOLOMON ISLANDS

Civil Case No. 102 of 1996 & 122 of 1996
(consolidated)

GUADALCANAL RESOURCES DEVELOPMENT

v

DADALSOL LIMITED & ORS - No 2

Before: Palmer, J

Hearing: 7th October, 1996 - Judgment: 4th November, 1996

Counsel: G. Suri for First Defendant/Applicant - P. Tegavota for Plaintiff/Firf/First Respondent

PALMER J:

There are two cases, Civil Case 102 of 1996 and 122 of 1996, which have been consolidated and heard together as the issues raised are similar. On the 7th October, 1996, the Writ of Summons and Statement of Claim filed on 3rd March, 1996, in Civil Case 102 of 1996, was struck off by this Court, under Order 33 Rule 21and 22, for failing to comply with the Order of the Court dated 20th September, 1996, to file a list of documents for discovery. The court then proceeded to hear submissions on the counter-claim of the First Defendant in Civil Case 102 of 1996, and the originating summons in Civil Case 122 of 1996.

The issue raised in both the Counter-Claim and the Originating Summons is the same and can be summarised as follows:

Whether the Plaintiff/First Respondent holds a valid timber licence issued under the Forest Resources and Timber Utilisation (Amendment) Act 1990 (the "FRTUA Act") to carry out logging activities in TAMBALEVU CUSTOMARY LAND and the customary land areas between Tangarare and Gausava River in West Guadalcanal.

First, I should point out that where an issue involves questions pertaining to the validity of a timber or felling licence, then it is only proper that the Commissioner of Forests Resources ("Commissioner") be joined as one of the parties in the case, so that opportunity can be given to him to appear and be heard if he so desires. That has not been done in this case.

The case of the First Defendant revolves mainly around the requirements set out under sections 5B and SC of the FRTUA Act. Learned Counsel, Mr. Suri for the First Defendant, seeks to submit that there was no compliance with the requirements set out in those provisions. He relies on the affidavit evidence of Peter Wateasi filed on 3rd May, 1996, and the affidavit of Mario Chango filed on 26 April, 1996. At paragraphs 1-4, in the affidavit of Peter Wateasi, he states inter alia, that he was elected into the Geana Area Council ("GAC") sometimes in the middle of 1991, becoming a President sometime in June of 1993 right through to 1995. The GAC, I should point out, is the Area Council that is responsible for any timber rights hearing in respect of the customary land areas that are in dispute in this case. Throughout the whole of that period, he states that the GAC did not deal with any application by Guadalcanal Resources Development Company Limited (GRDCL), for the acquisition of timber rights ( par 3) He also states that he was not aware that any Form II was ever issued in respect of the said Company during his term as member and in particular as a President.

This was confirmed in the affidavit evidence of Mario Chango referred to above, at paragraphs 1, and 11-13. Mario Chango also stated that he was elected a member of the GAC in 1991 and remained a member right through to 1995. He confirms that during his term as a member, he was not aware of any applications that had been considered by the Council for any timber rights hearing in respect of GRDCL.

The Plaintiff/First Respondent ("Plaintiff') on the other hand, has produced little or no evidence in rebuttal, to challenge the clear and unambiguous statements of Peter Wateasi and Mario Chango. I am satisfied I can rely on their statements as correct.

In addition to the above affidavit evidence, the First Defendant had also carried out its own investigations and research on the question as to how the licence of the Plaintiff had been issued. In the process they have uncovered a number of relevant documents and have submitted them to this court as exhibits. Copies of those documents have been conveniently annexed to the affidavit of Mr. Gabriel Suri filed on 7 October, 1996. The validity of those documents has not been challenged in court and I am satisfied I can rely on them as copies of valid documents.

The First Defendant relies on them as well as proof of its claim that the licence of the Plaintiff had not only been improperly issued, but also invalid. Those documents therefore will be considered in some detail. These include the following:

1) copy of the Timber Rights Agreement dated 17th February, 1994, between Guadalcanal Resources Development Company Limited and the Land-owners of Tangarare Hausava customary land areas (marked exhibit "GS 1" in the affidavit of Gabriel Suri filed on 7th October, 1996);

2) copy of the Form I application ("GS 2"); and

3) copy of the Form II application ("GS 4").

The first important point which Mr. Suri makes concerning those documents relates to the date the Timber Rights Agreement was recorded as having been executed, compared with the dates recorded in the Form I and Form II applications. Mr. Suri points out that the Form I application bears the stamp of the Ministry of Natural Resources, Forestry Division, with the date of 3016194. He submits that this meant that the said document had only been received in the Office of the Commissioner on or about the said date, but after the Timber Rights Agreement had already been executed. If that were correct, then the Timber Rights Agreement relied on was invalid. Again, I find that little or no evidence in rebuttal had been adduced against the clear and obvious discrepancy raised above.

Mr. Suri also points out that the Form II application also bears the date of 9th November, 1994 as the date on which that application was purportedly considered by the Area Council, and on which the Form II had been issued. Again I find that there is little or no evidence to show that the above date should be construed in any other way.

When the above evidence is considered, I am satisfied, it does show, as sought to be suggested by Mr. Suri that the Timber Rights Agreement had been executed well before the Form I and Form II applications had even been instituted. This is most unusual and amounts to, in my respectful view, a fundamental irregularity. According to the procedures set out in the FRTUA Act, a Timber Rights Agreement can only be executed, on or after the timber rights hearing and a determination had been made. In other words, if there is no form I application, then there can be no timber rights hearing and no determination. If there is no determination, then there can be no issue of Form II, and subsequently no timber rights agreement can be entered into. Under such circumstances there can be no basis for the issue of a felling or timber licence.

On the other hand, some smart aleck might argue that it is possible that a draft Timber Rights Agreement could be drawn up and "executed", prior to any timber rights hearing taking place etc., provided that the draft agreement is endorsed or confirmed during or after the timber rights hearing. Whilst such suggestion is possible, it can never be a substitute for or dispense with, the requirements set out in sections 5B and 5C of the FRTUA Act. Those requirements are mandatory and must be complied with before a valid timber rights agreement can be drawn up and executed. The fallacy in the submissions of the Plaintiff, is in seeking to rely on that Timber Rights Agreement of 17th February, 1994 as a valid document when the evidence showed very clearly, that the requirements of sections 5B and 5C had not been complied with.

Another discrepancy raised by the First Defendant is that, despite the purported issue of the Form I and Form II, there is no evidence whatsoever, to show that the GAC had held any timber rights hearing in respect of the customary land areas in Ghove, Tangarare, Chausava, and Tabalevu in West Guadalcanal, in particular on or about the 9th November, 1994. Apart from the stamp of the Geana Local Council appearing on the Form II, and the name of the Clerk to the Council printed on page two of the said form, there is no signature of any members of that Area Council visible on the form, as would have been expected. There is also no evidence, to show the composition of members of the GAC which supposedly dealt with that application on or about the 9th of November, 1994. This piece of evidence is crucial to the Plaintiff's defence, in the light of the denials by the President of GAC, Peter Wateasi, and Mario Chango (member), of ever receiving any timber rights applications and holding any timber rights hearings in respect of that Company. There is also no evidence of any records of proceedings and determinations of the GAC on that date. The inevitable conclusion to be drawn from all these is that the issue of the Form II was totally improper, unwarranted and unlawful, and cannot be relied on.

In turn, there was no basis in law whatsoever for the Certificate of No Appeal to be issued, and that action also amounted to the issue of nothing more than a meaningless piece of document. It is important to understand that the issue of the Certificate of No Appeal purports to certify that no appeal had been received from a determination of the Geana Area Council in respect of the Tabalevu, Tangarare, Gausava and Hamale/Kobau customary land areas. There was however, no evidence whatsoever to show that the GAC had ever held any timber rights hearing in respect of those lands, and made any determination. If there had been no timber rights hearings, then there couldn't possibly have been any determinations to appeal against, and hence no certificates could have been issued.

It should also be pointed out that section 5E(3) requires the Clerk to the Customary Land Appeal Court ("Clerk to the CLAC")to notify the Commissioner of any appeals and its result; and this would in my view also include the issue of any certificates of no appeal. That particular certificate of no appeal however had been issued by the "Clerk to the Central Magistrates Court", which is different to the Clerk to the CLAC, unless of-course the particular Clerk to the Central Magistrates' Court, Mr. Billie Kerepiniano, had also been appointed as the Clerk to the CLAC; in this case, it would have been the Guadalcanal CLAC. If that is correct, then he should still have signed that Certificate of no Appeal as the "Clerk to the Guadalcanal Customary Land Appeal Court". If however, there was no specific appointment of Mr. Kerepiniano as a Clerk to the CLAC, then he would have had no authority whatsoever, to have that document signed; unless he were a Magistrate exercising jurisdiction within the Province in which the CLAC had been appointed (see Order 60A of the High Court (Civil Procedure) Rules, 1964 for the definition of the "Clerk" to the Customary Land Appeal Court). So, if Mr. Kerepiniano was not the Clerk to the Customary Land Appeal Court, then that may explain why the Certificate had been issued, when it is clear that there is no supporting document (other than the bare Form II application), and no evidence whatsoever, that would have satisfied any reasonable Clerk, that a determination had been made by the GAC and thereby be able to confirm or not, whether an appeal had been made in respect of that determination. Had the right "Clerk" to the Guadalcanal CLAC considered the documents presented to him, (which in this case most probably would have been a Magistrate), then most likely, the defect would have been picked up and further enquiry made as to the validity and sufficiency of those documents, and whether in the circumstances any certificates should have been issued. It is important to appreciate that the issue of a certificate of no appeal is a duty imposed upon the Clerk to the Guadalcanal CLAC to discharge. It should never have been taken for granted or lightly, as has unfortunately happened in this case. It is important that Clerks to any CLAC must take time to consider the documents presented to them carefully and if not satisfied, to require verifying documents. On the evidence before this court, I am satisfied that there was no basis in law for such a Certificate of No Appeal to have been issued.

This brings me next to address the issue of the felling licence for GRDCL by the Commissioner. Again, it is important to appreciate that the Commissioner has been given a duty and responsibility to discharge in the exercise of his power to issue felling licences. These are set out in sections 5F and 5G of the FRTUA Act.

"5F. On receipt of the certificate issued under section 5D and on being satisfied

(a) the period for lodging an appeal under section SE has lapsed;

(b) if an appeal has been lodged, it has finally been disposed of; and

(c) for the granting of the timber rights referred to in such certificate has been duly completed in the prescribe form and manner and that the parties to, and the terms and provisions of, such agreement accord with such certificate or, where there has been an appeal under section 5E with the order of the court determining such appeal, the Commissioner shall recommend to the appropriate Government to grant approval to such agreement.

5G. (1) Upon receipt of a recommendation made under section 5F and the relevant agreement duly stamped, the appropriate Government may complete a certificate in the prescribed form approving the agreement and forward a copy to the Commissioner.

(2) The Commissioner on receipt of the copy of the certificate referred to in subsection (1) shall, within fourteen days, notify the parties to the agreement of such completion."

The statutory responsibilities described above should not be taken for granted or lightly by the Commissioner. They have been entrusted upon him by the National Parliament of Solomon Islands to be exercised for and on behalf of the People of Solomon Islands. The person who holds that Office at any one time therefore is charged with the primary responsibility to carry out his duties according to what the law says; and not what someone else might tell him to do. It is unfortunate that the Commissioner has failed to discharge that responsibility placed upon him by the People of Solomon Islands through its laws, in the issue of the licence to GRDCL. Had he taken the time to carefully consider the relevant documents forwarded to his Office for consideration; the Form I and Form II applications, and the Timber Rights Agreement, he would not only have failed to notice that the requirements set out under the FRTUA Act, (requirements which he would only have been familiar with) had blatantly not been complied with, but that the documents submitted to him contained fundamental defects, and that there was no way any reasonable Commissioner would have issued any felling licence under the circumstances, to GRDCL. The issue of the licence accordingly, was not only improper but totally unwarranted in law.

I have considered the submissions in reply of Mr. Tegavota carefully, but unfortunately they have focused more on attacking the validity of the First Defendant's licence, (which was not open to the Plaintiff to do as its claim in Civil Case 102/96 had been struck off), rather than on defending and proving that the issue of the Form I, Form II and the Certificate of no Appeal, together with the licence, were proper and valid. The absence of any vital evidence can only be detrimental to the defence of the Plaintiff's case, especially in the light of such clear and plain evidence from the President and a member of the Geana Area Council; Mr. Peter Wateasi and Mr. Mario Chango. I find that there has been very little challenge to the evidence adduced by the First Defendant against the Plaintiff on the question of validity of the licence issued to GRDCL.

I mentioned earlier on in this judgment that the Commissioner should have been joined as a party in this case and opportunity given to him to be heard. After careful thought and consideration however, of the issues raised in this case, I have come to the conclusion that it would not have made any difference if the Commissioner were to be given an opportunity to be heard, as the evidence adduced by the First Defendant in support of its case had been clear and overwhelming. Accordingly, I have decided against giving any such opportunity to the Commissioner to be heard before making any final orders.

After careful thought, I am satisfied that the appropriate orders to be made shall be as follows:

ORDERS OF THE COURT

(1) Declare that the issue of the Felling Licence No. TIM 2/37 under the Forest Resources and Timber Utilisation (Amendment) Act 1990 in respect of Tangarare, Hausava, Ghove, and Tabalevu customary land areas in Wards 4 and 5 of West Guadalcanal was invalid, and accordingly that the said Licence is invalid.

(2) Order that an account be taken of the sales of all logs or timber in respect of the said Tabalevu customary land whether sold overseas or locally, and of the moneys received by the Plaintiff/First Respondent.

(3) Order that the issue on damages for loss of production be adjourned to Chambers, and to be listed for hearing on application by the First Defendant/Applicant.

(4) Costs in favour of the First Defendant/Applicant, to be taxed if not agreed.

Albert R. Palmer,
Judge