Levo v Exploration Acabit Incorporated [1998] SBHC 103; HCSI-CC 264 of 1997 (20 July 1998)

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 264 of 1997

JOHN WESLEY LEVO

-v-

EXPLORATION ACABIT INCORPORATED & ATTORNEY-GENERAL

High Court of Solomon Islands
(Palmer J.)
Civil Case No. 264 of 1997

Hearing: 15th May, 1998
Judgment: 20th July, 1998

S. Watt for the Plaintiff
A. Radclyffe for the First Defendant
J. Hauirae for the Attorney-General

PALMER J.: This is an application by Notice of Motion for the determination of two preliminary points of law:-

1. Whether or not the surface access rights agreement entered between the First Defendant and members of Hanapara and Simea tribes and dated 14th July, 1997 is a valid agreement in respect of the prospecting area known for purposes of said agreement as “Kariki Land”.

2. Whether or not the Prospecting license No. PL 13 of 1997 issued by the Second Defendant to the First Defendant pursuant to the aforementioned surface access agreement and which extends to the whole of Fauro Island including “Kariki land” has been validly issued under section 21 of the Mines and Minerals Act, 1990 and the Regulations thereto.

THE BACKGROUND FACTS:

The area of land applied for by the First Defendant for a prospecting license is described as Kariki Land in Fauro Island (see paragraph (A) of the recital of the Surface Access Agreement dated 14th July, 1997). Kariki Land in turn is comprised primarily of three tribal lands; the Simea tribal lands, Hanapara tribal lands and Baoahu tribal lands (see paragraph 1 of the affidavit of John Wesley Levo filed 24th October, 1997). According to the affidavit evidence before this Court, the areas of these tribal lands are separate and distinctive to each other.

The Plaintiff claims to be the Chief of Simea tribe who are the owners in custom of Simea tribal lands. The Simea tribal lands in turn comprise of land communally owned and blocks of land individually owned by members of the tribe (see paragraph (1) of the affidavit of John Wesley Levo filed 24th October, 1997 and paragraph (1) of the affidavit of Lester Sogabule filed on 23rd February, 1998).

THE SURFACE ACCESS AGREEMENT:

According to the affidavit evidence of Primo Amusaea, Assistant Geologist, filed on 7th January, 1998, a meeting was held at Kariki Village on 14th May, 1997 for inter alia, the purpose of identifying the landowners and landholding groups or persons interested in the land applied for (see paragraph 5). Unfortunately it seems, the meeting got carried away by the demands of the landowners present, seeking to exact some payment or benefit in exchange for their surface access rights. The related issues therefore pertaining to the particular areas of land owned by the landowners were not addressed in detail. These appear to have been overlooked in that meeting when it was resolved inter alia that an agreement be entered into between the landowners present and the applicant. Subsequently, a surface access agreement was signed on 14th July, 1997.

That agreement was made between “The Landowners and Trustees” of one part and the First Defendant of the other part. The area of land identified for prospecting was edged red/black on a plan and known as Kariki Land. Therein lies the root of the problem in this case. Kariki Land consists of numerous blocks of land owned by various tribes and persons.

Page 13 of the Agreement (this is Schedule Four to the Agreement), contains the names of the persons who claim to be Landowners over Kariki Land and had the right to grant surface access rights over the said land. Four of the signatories to that agreement, Solomon Die, Mathias Maelagi, Salome Tuma, and Lester Sogabule (brother of the Plaintiff) are conceded by the Plaintiff to be senior landowners within Simea tribe and entitled to grant rights but only over blocks of land which they own.

THE PLAINTIFFS CONTENTION:

The Plaintiffs main contention is that the signatories who purported to represent the Simea tribe can only grant rights confined to lands which they own but not lands owned or controlled by other members, including himself. To that extent, it was incorrect to assert that the First Defendant had acquired surface access rights over the whole of Simea tribal land.

THE QUESTION FOR DETERMINATION:

The question which the applicant in consultation with the Director of Mines was required to ascertain was the identity of landowners, landholding groups or any persons having an interest in the land in the prospecting area [section 21 (4)(a)]. Directly connected to this is the question pertaining to the boundaries of the land owned by those persons.

As already mentioned, Simea tribal land is within the prospecting area. The applicant and Director therefore were obliged, not only to identify the landowners, landholding groups or any persons having an interest over inter alia, Simea Tribal lands, but the boundaries of their lands. They carried out the first part but not the second in the meeting held on 14th May, 1997 at Kariki Village.

THE PLAINTIFF - A LANDOWNER?

One of the pertinent questions to be considered is whether the Plaintiff is a landowner, a member of a landholding group, or a person having an interest in the land in the prospecting area [section 21(4)(a)].

From evidence before this court, (see affidavit of John Dixon filed 27 November, 1997; affidavit of John Wesley Leva filed 24th October, 1997 and affidavit of Lester Sogabule filed 23 February, 1998), it is clear the Plaintiff had been identified as a landowner or a person having an interest in the land in the prospecting area. The applicant and Director accordingly were obliged under paragraph 21 (4) (b) to enter into negotiations with inter alia, the Plaintiff for surface access rights over those parts of Simea tribal lands which he owned.

According to affidavit evidence before this court, it appears attempts were made but were unsuccessful in reaching an agreement with the Plaintiff (see paragraph 3 of affidavit of John Wesley Levo filed 24th October, 1997). The Plaintiff did not even bother to attend the meeting held at Kariki Village on 14th May, 1997. It appears that there had been some misunderstanding over the rights of landowners over the question of acquisition of surface access rights. All that the applicant can do is seek to enter into negotiations with those landowners for the purpose of acquiring surface access rights. Where no agreement is reached then, the application will have to be amended to exclude the areas not covered. Unfortunately for the Plaintiff due to some misunderstanding it seems, his areas were not excluded from the surface access agreement signed on 14th July, 1997.

NO AGREEMENT BETWEEN THE APPLICANT AND THE PLAINTIFF:

What should happen where no agreement is reached between the applicant and the land owner(s)? Two situations are presented by subsections 21 (6) and (7). The scenario in subsection 21 (6) is where no agreement is reached at the end of the period specified in the letter of intent. That does not apply in this case.

The second scenario presented in subsection 21 (7) applies to the situation where agreement is reached in respect of only part of the proposed prospecting area but not the remainder or other parts. This would seem to be the case here, although not expressly admitted or may be appreciated. Agreement was reached with some landowners of Kariki Land, but not all, including the Plaintiff. In that situation, paragraphs (a) and (b) of section 21 (7) provides that the Board may:

“(a) extend the said period; or

(b) request the applicant to amend and subdivide his application to cover -

(i) areas in respect of which agreement has been reached; or

(ii) areas in respect of which agreement has not been reached.”

Paragraph (b) above is the relevant clause. It appears from evidence before this court that the Applicant (First Defendant) did not formally raise the scenario in subsection 21 (7) with the Board; either through oversight or ignorance. Accordingly, none of the matters stipulated in paragraphs (a) and (b) above were ever considered by the Board. As a result, the agreement executed on 14th July, 1997 did not correctly reflect the true state of affairs on the ground; that there were other landowners, one of whom was the Plaintiff, who had not given consent over their lands for surface access rights to be transferred. In that particular instance, the Plaintiff had not agreed to transfer surface access rights to the applicant Company.

FAILURE TO COMPLY WITH SUBSECTION 21(7):

As a result of this failure to comply with the requirements of paragraph 21 (7)(b), the surface access agreement executed on 14th July, 1997 did not accurately state what areas agreement had been reached on and those not agreed upon. Instead it purported to include surface access rights over the whole of Kariki land; which is incorrect. To that extent it is defective.

Subsequently, the area over which the prospecting licence had been issued has been incorrectly described. It is incorrect to assert that agreement had been obtained over the whole of Kariki Land. A prospecting licence should only be issued in respect of areas where a surface access rights agreement had been obtained [subsections 21 (8) and (9)]. It should not include areas not covered by any agreements between the landowners and the applicant. This has been the cause of the Plaintiff’s complaint. Had the requirements set out in subsection 21 (7) of the Mines and Minerals Act 1 990 been addressed, it appears no cause for complaint would have arisen.

VALIDITY OF THE SURFACE ACCESS AGREEMENT:

Despite the non-compliance, is the agreement valid? In my respectful view, the agreement could only have been valid in respect of areas over which agreements had been obtained by the Applicant. It is clear on the evidence before this Court that the signatories to the Agreement were entitled to grant surface access rights but only over those areas of land which they owned or had direct control over. It was incorrect therefore for anyone to assert that surface access rights had been granted over the whole of Kariki land. To that extent and in its present form, the agreement is inaccurate and may be defective but not invalid. To hold that the agreement was invalid in my respectful view would not do justice to the circumstances of this case. The Act does take into account and provide for the situation where agreement is only reached over part of the proposed prospecting area, as is the case here. The problem that has arisen in this case is that the relevant provisions governing that situation had not been taken into account by the applicant and the Board. The question which this court must consider is whether that error or defect can be rectified without affecting the rest of the agreement. If that can be done, then opportunity should be given.

In my respectful view, (this is obiter) what should now happen is for the prospecting licence to be suspended forthwith and the Applicant given opportunity to consult the Board with the view to amending the agreement to cover areas over which agreement had been reached or otherwise. The plan and licence can then be amended accordingly to reflect the true position on the ground. If the Applicant fails to take the necessary steps then the suspension should be for an indefinite period of time.

THE VALIDITY OF THE PROSPECTING LICENCE ISSUED:

The second part of the Plaintiff’s application addresses the validity of the licence issued on 17th July, 1997 (see exhibit “A” in affidavit of John Dixon filed 27th November, 1997).

The first ground raised alleges breach of the rules of natural justice in not notifying the Plaintiff of the issue of the letter of intent by the Minister pursuant to section 21 of the Mines and Minerals Act 1990 and in not giving him opportunity to be heard before the said letter of intent was issued.

With respect, these grounds have been misconceived. All that the Minister issued pursuant to section 21 is a letter of intent to issue a prospecting licence subject to an applicant acquiring surface access rights. No rights of the Plaintiff had been acquired or opportunities to be heard deprived. The rights of the Plaintiff to be heard are protected and provided for under the provisions of subsection 21 (4).

The second ground raised, that of bias in the making of the decision, is also misconceived. The issue of a mere letter of intention confers nothing on the applicant other than what it says. The applicant is still required under section 21 (4) (a) and (b) to take such measures as are necessary to identify inter alia, the landowners and to enter into negotiations with such persons for surface access rights. There is no bias or prejudice involved in the matters which the applicant in consultation with the Director is obliged to address. The Minister only becomes involved next, after agreements had been successfully obtained [section 21 (9)].

PROCEDURAL IMPROPRIETY:

Before a prospecting licence can be issued, surface access rights over the area applied for must first be obtained from identified landowners. It is not in dispute that the applicant had sought to identify the landowners and persons having an interest in the land in the prospecting area and to enter into negotiations with those persons for surface access rights. The problems and difficulties encountered by the applicant however had been compounded by the peculiar land tenure system in Solomon Islands.

What the applicant in consultation with the Director failed to do was to identify the specific land areas within Kariki Land which the signatories (Landowners) to the agreement owned or controlled.

The question this court has to determine is whether this failure renders the agreement invalid. In my respectful view, the answer to this question must be no. It is not a mandatory omission or failure, such that this court is obliged to set the agreement aside; merely directory. The reason being that the failure is one which can be easily rectified without affecting the rest of the agreement. The applicant had actually performed a substantial part of the requirements imposed upon him under paragraphs 21 (4) (a) and (b). It had sought to identify the landowners or persons having an interest in the prospecting area, and entered into negotiations for purposes of obtaining surface access rights. It cannot be said therefore that the whole of the agreement subsequently is invalid, because there are parts of the land in the prospecting area over which valid surface access rights have been obtained. Perhaps the only oversight was in failing to identify the land areas over which those landowners had purported to grant surface access rights. It would be equally wrong and unfair therefore, to deprive those persons and the applicant, of the right to enter into an agreement for the transfer of surface access rights.

The irregularity, error or omission therefore is not crucial or fatal to the validity of the agreement and subsequently the issue of the prospecting licence.

IMPROPER EXERCISE OF POWER TO ISSUE A LICENCE:

This brings me to address the third ground relied on; that the decision to issue a license in the circumstances was an improper exercise of the power conferred on the Second Defendant by the Act. The objection raised is that the Minister failed to take into account the acquisition of surface access rights from all landowners identified in the whole of the prospecting area applied for.

Unfortunately, this fails to take into account and appreciate the fact that what the Minister was obliged to take into account were the requirements set out in subsection 21 (8) of the Act. There is no evidence to show or suggest otherwise that the Minister did not take those matters into account before issuing the prospective licence. The objection raised is a matter for the applicant and the Director to address in the earlier stages with the landowners or persons having an interest in the land. By the time it reaches the Minister for purposes of issuing a prospective licence, he only needs to be satisfied with the matters set out in subsection 21 (8) of the Act.

I am not satisfied therefore that the issue of the licence in this case was an improper exercise of the power conferred by the Act.

ABUSE OF POWER BY SECOND DEFENDANT:

This ground can be shortly disposed of. The Minister was only obliged in law to take into account matters set out in subsection 21 (8) of the Act. There is no evidence to suggest that he did not take those matters into account before issuing the licence in this case. It was not an abuse of power therefore.

REGULATION 9 OF THE MINING REGULATIONS:

The requirements of Regulation 9 in relation to the application for a prospecting licence are in line with the requirements set out in the Act. A clear description of the area over which the prospecting licence is required should accompany the application (section 20(d)).

The report of the Director (annexure “C” to the affidavit of John Dixon filed 27th November, 1997) sets out in clear detail (albeit after the prospecting licence had been issued), his recommendations. What should have happened was for the report to have been prepared for the attention of the parties and the Minister before any licence is issued.

At clause 6.4 of his report, he recommended that the surface access agreement be upheld. Clause 6.6 recommended that the First Defendant (applicant) “... must exert much effort to have the Surface Access Rights Agreement signed as well the MOU by the two grieved landowners (one of these is the Plaintiff) as soon as possible.”

Clause 6.7 recommended that in the event the two landowners are not satisfied then prospecting work should not be allowed. In fact, prospecting cannot be allowed.

It is clear from that report that despite the absence of an agreement with the Plaintiff regarding his land in Kariki Land, a prospecting licence was issued which included the whole of Kariki Land. That was clearly wrong.

VALIDITY OF THE LICENCE:

I have already made clear in this judgment that the prospecting licence issued could only be valid for areas over which surface access rights had been obtained. The view taken by the Plaintiff however is that the licence issued is invalid because surface access rights were not obtained for the whole of the prospecting area; only some. Respectively I cannot agree. The invalidity in this case is severable and to that extent the licence is valid only in so far as it covers areas of land over which surface access rights had been obtained.

CONCLUSION:

The conclusion of the matter can be summed up as follows. Whilst there have been failures on the part of the applicant and the Director in not ensuring that the areas over which surface access rights had been obtained were clearly identified and distinguished from others, I am not satisfied that such a failure or omission amounted to an error of law going to jurisdiction. It was one within jurisdiction and which could easily be rectified given the opportunity. This accordingly must have a bearing on the orders which this court could make.

For purposes of the orders sought in the Notice of Motion, the determination of this court is as follows:

1. The surface access rights agreement entered into between the First Defendant and members of the Hanapara and Simea tribes dated 14th July, 1997 is valid only in respect of those areas within Kariki Land, over which the signatories to that agreement claim to own or control whether in their individual capacities or as representatives of any tribe or groups that they have been mandated to represent.

2. The Prospecting Licence No. PL 13 of 1997 issued by the Minister is valid only in so far as it relates to land within Kariki Land over which surface access rights had been obtained.

3. The costs of this application in any event to be borne by the Defendants in equal shares.

Bearing in mind the nature of the application seeking preliminary orders, and taking into account the effect of the determinations of this court, this case would not be complete without further directions or orders from this court. Accordingly, subject to any further submissions from the parties, I propose to make the following orders:

1. Direct that the Prospecting Licence No. PL 13 of 1997 be suspended forthwith pending determination of the following matters:

(a) Direct that the Applicant (First Defendant) in consultation with the Director and landowners (signatories to the Surface Access Rights Agreement dated 14th July, 1997) identify clearly on a map or plan and on the ground, the boundaries of the areas of land which they own or control.

b) Direct that areas of land which the Plaintiff owns or control be also clearly identified in like manner.

2. A period of thirty days be given to have those matters sorted out.

3. Direct that the Surface Access Rights Agreement subsequently be amended to reflect paragraphs (a) and (b) above.

4. Direct that the Prospecting Licence No. PL 13 of 1997 be also amended to reflect paragraphs (a) and (b).

5. The matter to be listed for chambers hearing in two weeks time.

THE COURT.