Iwane v Dai Island Sawmilling Ltd [1998] SBHC 100; HCSI-CC 372 of 1995 (25 June 1998)

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 372 of1995

JOHN MANUI IWANE

-v-

DAI ISLAND SAWMILLING LIMITED AND OTRS

HIGH COURT OF SOLOMON ISLANDS
(PALMER J.)
Civil Case No.: 372 of 1995

Hearing: 28th April, 1998
Ruling: 25th June, 1998

A. NORI FOR THE APPLICANT/PLAINTIFF
T. KAMA FOR THE RESPONDENT/DEFENDANTS

PALMER J.: There are two applications before this Court for consideration. The first one is the summons of the Plaintiff filed on 2 April 1998 seeking orders inter alia, to restrain the remaining trust funds pending determination of this case. In other words, no further deductions should be permitted. In the alternative, the Plaintiff seeks an order for the deposit into court a sum equivalent to the total of FOB proceeds of logs sold, as security for costs and damages.

The summons of the Defendants on the other hand seeks the very opposite, for payment of reasonable expenses to be approved.

Judgment in this case had been delayed to some extent in that the information required by the Court had not been produced by learned Counsel for the Respondents until 18 June 1998.

Mr. Nori relies on the judgment of his Lordship Sir John Muria CJ in the case of Rolland Masa & Others v Kololeana Development Company Limited & Others, Civil Case No. 361 of 1995. His Lordship, Sir John Muria CJ gave recognition in that case to the fact that damages including exemplary damages for trespass and conversion may be considered if the Plaintiff wins his case at the end of the day. Mr. Nori also referred to his Lordships comments regarding the financial capacity of the Defendants in that case to pay damages in the event the plaintiffs succeed.

The argument of the Plaintiff is that his case is also foundered on questions of ownership and therefore claims for damages on trespass and conversion should be relevant considerations if he wins his case ultimately. He also suggests that the quantum of damages for trespass and conversion is not the cost of re-afforestation but the value of the diminished resource; in this case, the trees. This meant that the correct value of quantum should be the FOB price of the logs sold. He argues thereby that the court should require security to the said amount.

Further, he pointed out that unlike the situation in Rolland Masa’s Case (ibid), where the Court found that there was no evidence to suggest that the Defendants do not have the financial capacity to pay damages, he has filed affidavit material to show to court that the Defendant Company does not have the means to pay damages in the event the Plaintiff wins his case, and therefore this Court should not permit any further deductions of the funds currently held in trust, until determination of this case.

The submissions of learned Counsel, Mr. Nori, respectively, do have merit. This court does have discretion to require security for costs to be paid. In the circumstances of this case however, I find it inappropriate to make any such orders.

On the question whether security for damages should also be set aside, I am satisfied there is already clear precedent set down by this Court in numerous logging cases. The only issue which appears not to have been agitated at all, (may be, because parties rely more on the usual wording of the orders of the court in permitting reasonable expenses incurred in the operation to be deducted), is whether a certain percentage can be set aside for that purpose alone and not be subject to the usual orders of deduction for reasonable expenses.

On this particular issue, there does appear to be clear precedent already set by the Court of Appeal of Solomon Islands but little referred to, as to the possible amount (percentage) that could be set aside. In the case of Mega Corporation Limited v Nelson Kile; And Zarihana Timbers v Nelson Kile CAC No. 1 of 1997, judgment delivered on 24th April, 1997, the Court of Appeal set aside the restraining orders which prohibited any logging operation to take place, but ordered that a certain percentage be set aside. This amounted to “10% of the fob price of each shipment net of duties and levies payable to Solomon Islands Government”, to be deposited into an interest bearing deposit account of the Solicitors in the case. The rationale for this obviously was to cover any damages which might arise in the event that the Respondent wins his case at the end of the day.

I do not see any reason why this court should not adopt the same approach in this case and set aside a percentage to cover such damages in the event the Plaintiff wins his case. And if it should turn out that damages set aside are insufficient, then it would be open to the Plaintiff to take enforcement actions against the Defendants. It would not be appropriate therefore to require that security for damages be set aside to the amount of the FOB price. That would be a matter best left for argument at trial. At least having 10% set aside should provide some immediate measure of damages to the Plaintiff should he succeed. It should also be borne in mind that no further logging has been undertaken and so there is no further risk of loss to the Plaintiff.

In the circumstances, in dealing with the summons of the Plaintiff, indirectly the summons of the Defendant has also been dealt with and I do not need to address the specific matters raised thereby.

ORDERS OF THE COURT:

1. Grant the order sought in paragraph 1 (a) of the Plaintiff but limited to 10% of the FOB proceeds net of duties and levies payable to the Solomon Islands Government; that is 10% of (USD 545,831.00 less duties and levies payable to Solomon Islands Government). [Note the exchange rate should be calculated as at 14th November, 1996].

2. Costs in the cause.

THE COURT.