Iwane v Dai Island Sawmill Ltd [1997] SBHC 82; HC-CC 372 of 1995 (3 March 1997)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 372 of 1995

JOHN MANUI IWANE

-V-

DAI ISLAND SAWMILL LIMITED & VINCENT SAMO WATENIAU & CLEMENT DIAU

High Court of Solomon Islands
(Palmer J)

Hearing: 17th February, 1997
Judgement: 3rd March, 1997

T. Kama for the Applicant/First and Second Defendants
A. Nori for the Respondent/Plaintiff

PALMER J.: This is a continuation of the application by summons filed on 6th December, 1996, for approval of payment of reasonable expenses of the Defendant in respect of the outstanding matters set out in the affidavit of Vincent Samo Wateniau filed on 16 December, 1996.

Paragraph 5 B. Purchase of a fibre glass canoe from BP Investment Company Limited. The amount claimed is for $6650.00; see invoice marked "VSW4" attached to the affidavit of Vincent Samo Wateniau dated 23rd April, 1996. The objection of the Respondents against the deduction of this expense is based on the view that this expense should be seen as a capital expenditure and therefore non-deductible. Whilst this may be so, with respect, it is still a necessary expense incurred in the course of the logging operations and therefore deductible. No dispute has been raised that it was never used for or in the logging operations. The submission that it is a capital expenditure and thereby forms an asset of the company is immaterial at this point.

Paragraph 5 C. Food expenses. A total of 6 invoices have been produced amounting to $21,753.74. These are marked exhibit "VSW5". The first invoice is marked no. A1114 and dated 15/11/95 totalling $6,582.80. The total amount in respect of that invoice however only came to $3,661.30. There is another invoice though no. A1115 also on the same date and this shows the balance of invoice no. A1114 being added to the balance of invoice no. A1115. The sum of these comes to $6,562.80; which is roughly the amount claimed. The items listed in invoice no. A1114 however do not all show food items. In invoice no. A1114, items 5 to 10 in my respectful view are not deductible. The total of these items comes to $2,011.60. This should be deducted from the amount of $3,661.30. The amount allowed accordingly is $1,649.70.

In invoice no. A1115, the only items to be approved in my view are items (1), (2), (5), and (7). These come to a total of $155.30.

The second list of invoice numbers are marked A1124-25 and dated 29 March, 1996. With respect, these items have not been screened properly before submitting to court for approval. That is simply not good enough. There are items included there which should have been deducted from the total claim from the beginning. Only items (1), (2), (3), (4), and (9) are to be approved. These all amount to $1,017.30. Invoice No. A1125 does not contain food items and therefore non-deductible.

The third invoice listed is no. 3142568 from Leong Gin Store for $1,633.23. I am satisfied the items there should be approved.

The fourth invoice is no. 3146257 and dated 28/12/95 for $3,084.55. All items are approved saved items no. (6), (7), (8), (11), (12), and (13). The amount approved comes to $2,564.00.

The fifth invoice is no. 3143526 dated 12/02/96 for $5,725.07. Items approved are nos. 1-7 only, totalling $4,417.60.

The final invoice is no. 3143987 for $1,943.39. Items approved in my view are nos. 1-5, and 9. This comes to $1,543.55.

The total amount approved under paragraph 5 C accordingly is $12,980.68.

Paragraph 5 D. Hire of helicopter from Air Transport Limited for the journeys made on 18th September, 1995 and 8th April, 1996. The total came to $21,473.96. I am satisfied these amounts are deductible and accordingly approved. I accept the explanations of the Applicant as provided from the Bar table by learned Counsel.

Paragraph 5 E. Purchase of materials for office building in Dai Island totalling $4,162.80. I am not satisfied that this amount is deductible. These are not expenses which could be deducted in the circumstances.

Paragraph 5 F. Charter or hire of marine vessels from October 1995 to February 1996. The Applicants claim total $26,235.83 for various charters of vessels as set out in Paragraph F. Mr Nori objects to the payments of all the charters save for the charter of the Landing Craft Bulumakao, which he agrees would have been used for the carriage of bulldozers and other heavy machinery. It is my respectful view that all the charters should be approved save charter no. 5 of MV Atawa for $3,500.00. This claim does not have any supporting documents and accordingly should be denied. This brings the amount claimed and allowed to $22,735.83 only.

Paragraph G. Hire of Bulldozer from CP Homes of $25,000.00. I am satisfied this amount should be paid.

Paragraph H. Chainsaw and spare parts from UMW Solomon Islands Limited in the sum of $82,578.37. Details of the purchases pertaining to these items are contained in exhibit "VSW9". There is no evidence to the contrary that these claims may not have been genuine. I am satisfied the amount should be approved.

Paragraph I. Fuel and lubricant from Shell Company Pacific Islands Limited in the sum of $25,327.63. I am satisfied this amount should be approved subject to clear copies of invoices in support of the claims being produced.

Paragraph J. Purchase of generator from C&I Distributors Limited of $16,502.00. Exhibit "VSW11" shows the associated items purchased together with the generator. Mr Nori objects to this payment on the ground that it is a capital expense. With respect however this is immaterial at this point. I am satisfied this is a necessary expense in the circumstances and should be approved with the exception of the Makita Planner for $891.00. Amount approved accordingly is $15,611.00

Paragraph K. Claim for office rental for $24,000.00 at $2,000.00 per month for 12 months. Unfortunately, no rental agreement has been produced or any documentary evidence in support. I am not satisfied accordingly on the balance of probability that this amount should be paid.

Paragraph L. Purchase of two way radio sets and accessories from Cruz Communications and Engineering Limited for $16,616.00. I am satisfied these sets are essential for communication purposes when logging operations are undertaken, and accordingly should be approved. The amount claimed and the amount stated in the invoices however do not correspond. The amount to be approved therefore should be $11,857.00 only.

Paragraph M. Telephone and facsimiles from January to June 1996 totalling $21,580.29. The Applicant acknowledges that not all the calls were made in the course of the logging operations and accordingly seeks to claim only one half of the total bill ($21,580.29) charged for that period. Copies of the telephone bills have been provided in support of the claim. I have had the opportunity to peruse and add up all the overseas calls only and come to a figure which is more than the amount claimed if the total amount is halved. I am satisfied accordingly that the amount claimed for only $10,790.00 is more than justified in the circumstances and should be approved.

Paragraph N. This is a claim for the purchase of three motor vehicles totalling $70,000.00. With respect, this expense cannot be approved as related to the costs incurred in the course of removing and exporting the logs on Ndai Island.

Paragraph O. Claim for allowances of directors at $168,000.00 at rates of $2,000.00 per month for six directors. Whilst it is appreciated that the rates of allowances for directors is a matter for them alone to determine, there is no document in support of their claim apart from the submissions from the bar table. Mr Nori suggests that the amount claimed is excessive. Bearing in mind that the proceeds are subject to restraining orders of this court by virtue of the fact that the question of ownership of those trees is the subject of dispute between different landowning groups, it is my respectful view that only a portion of the amount claimed should be approved. And this would be at one third of the rate claimed. Amount approved accordingly at the rate of $670.00 per month for 6 directors for 14 months is $56,280.00.

Paragraph P. Shipping and clearance charges in the sum of $3,777.40. I am satisfied this claim should be allowed. There is no evidence to suggest that this is a fictitious claim. Mr Nori seeks to suggest that the claim of Mr Peter Aufiu is covered under the Agreement signed on 18th March, 1996 between Rafea Kwaleuna Sawmilling Co-operative Society Limited and Peter Aufiu of Evergreen Forest Industries Limited of one part and the First Defendant of the other part. Mr Kama however explained in his submissions that this was work carried out outside of his term of contract. He also pointed out that Mr Aufiu had to have the ship cleared urgently when it arrived in Honiara as there was no customs clearance for the ship on arrival in Honiara. I am satisfied this claim should be approved.

Paragraph Q. Safety wears purchase from Solomon Islands Supplies Limited of $1,376.70. Mr Nori does not raise any objection to approval of this payment. I am satisfied this claim should be approved.

The total amount approved for payment with the exception of fuel and oil charges comes to $271,110.94.

On the question of costs, each party in my view should bear their own costs.

ORDERS OF THE COURT

1. Approve amount of $272,917.14 for payment of expenses of the Defendants as claimed.
   

2. Each party to bear their own costs.

THE COURT