Kasa v Biku [2000] SBHC 62; HC-CC 126 of 1999 (14 January 2000)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 126 of 1999

ALLAN KASA & ELMA KASA

-v-

REX BIKU & COMMISSIONER OF LANDS

Hearing: 11^th November 1999
Judgment: 14^th January 2000

D. Hou for the Plaintiffs
F. Walelia for the 1^st Defendant
S. Manetoali for the 2^nd Defendant

MURIA CJ: This is an appeal by first defendant against the decision of the learned Registrar made on 16 August 1999. A number of grounds have been advanced in support of the appeal. I set out those grounds as follows:

1. The learned Registrar erred in finding that the trust implied by the First Defendant's status as a customary landowners' representative is governed by the common law of England and that by reason thereof the learned Registrar was empowered to make the orders affecting discovery, inspection and contempt of the Court.

2. The learned Registrar exceeded his jurisdiction in that:

(a) the Registrar was not empowered to make any order or pre-emptive directions affecting a contempt of the Court or any other order or directions attracting a penal sanction; and,

(b) the Registrar was not empowered to issue pre-emptive directions in this instance or, in the alternative he was not empowered to issue pre-emptive directions beyond the ambit of the Court judgment dated the 14^th May of May 1999; and,

(c) the Registrar made orders or directions as to discovery and inspection without due regard to the summons filed by the Plaintiffs on the 25^th day of June 1999 and thereby deprived the First Defendant of an opportunity to adequately respond to and address the Court on the issues relevant to the orders.

3. The orders of the learned Registrar were unjust and unreasonable in the circumstances in that:

(a) the time limits imposed by the orders did not permit the parties a sufficient time and reasonable opportunity to access relevant documents at Munda for the purpose of discovery and inspection;

(b) the time limits imposed by the orders did not permit the First Defendant a sufficient time and reasonable opportunity to consider the merits of this appeal bearing in mind the time limits allowed for an appeal against a decision of the Registrar of the Court.

The first defendant has asked this Court to set aside the learned Registrar's decision and prayed for the following consequential orders:

(a) the Plaintiffs file a proper summons for directions seeking directions or orders affecting discovery and inspection and thereby enabling the parties a proper opportunity for full argument on the issues;

(b) any application for contempt be heard by a Judge of the Court having jurisdiction to make orders as to contempt of the Court;

(c) questions affecting the duties and rights of the First Defendant as a representative or trustee of customary owners of Ziata land be referred to the Roviana Local Court for determination;

(d) the Solicitors for the parties submit for consideration by this Court additional or specific issues for determination by the Roviana Local Court;

(e) an order for stay of the interim orders made by this Court pending any determination by the Roviana Local Court.

I shall deal with grounds of appeal in the order they were argued.

Ground 1

This ground of appeal raises a very important question which the Courts in this country have not yet been able to confront from the forefront. This is the question of the application of the principle of "trust" in customary land. I think the Courts in this country and particularly those manned by those of us who are knowledgeable in the law and who live under the custom that governs customary land in this country an obligation and a duty to resolve this important question. It would be wrong to ignore it or simply brush it aside while our very own people who are affected by such a concept have been left in uncertainty as to where they stand especially in customary land matters.

Trusteeship and customary land.

The majority of the land in this country is owned by customary landowners and governed by customary law. Ownership and disposition of customary land are therefore governed by customary law, although in these days of modern Solomon Islands, customary land have had its share of the effect of modernisation. This is not surprising as economic and social developments are taking place on customary land. The cash economy concept contributes, and will continue to do so, to the new values placed on customary land in Solomon Islands. Consequently disputes, in many instances, became direct consequences of these developments and the Courts have been called in to help resolve them.

One of the issues often raised in these customary land disputes is that of "trust" or "trustee." The concept of trust is not known in customary law and hence, the use of such expression when describing a relationship between the parties in a customary land dispute must be carefully guarded. Not only that the parties have resorted to the trust concept in support of their cases at times but the Courts too, have the tendency, whether consciously or unconsciously, of adopting and applying the concept as applied under received law. Blindly adopting legal and equitable concepts under received law must be avoided where such concepts do not apply or cannot accommodate the fundamental principles of customary law jurisprudence.

The Constitution recognises and gives customary law a place in the legal system in Solomon Islands. Paragraphs 2 and 3 of Schedule 3 to the Constitution provides as follows:

2. (1) Subject to this paragraph, the principles and rules of the common law and equity shall have effect as part of the law of Solomon Islands, save in so far as:-

(a) they are inconsistent with this Constitution or any Act of Parliament;

(b) they are inapplicable to or inappropriate in the circumstances of Solomon Islands from time to time; or

(c) in their application to any particular matter, they are inconsistent with customary law applying in respect of that matter.

2. The principles and rules of the common law and equity shall so have effect notwithstanding any revision of them by any Act of the Parliament of the United Kingdom which does not have effect as part of the law of Solomon Islands.

3. (1) Subject to this paragraph, customary law shall have effect as part of the law of Solomon Islands.

(2) The preceding subparagraph, shall not apply in respect of any customary law that is, and to the extent that is, inconsistent with this Constitution or an Act of Parliament.

(3) An Act of Parliament may:

(a) provide for the proof and pleading of customary law for any purpose;

(b) regulate the manner in which or the purposes for which customary law may be recognised; and

(c) provide for the resolution of conflicts of customary law.

Thus the Constitution provides for the application of customary law as part of the laws of Solomon Islands and it ranks ahead of the common law and equity. The Courts must therefore strive to give recognition to principles of customary law where necessary and where they are not inconsistent with the Constitution and an Act of Parliament.

In the present case, Mr. Waleilia argued that the learned Registrar applied the principles of law on trust as existed under the English common law and that argued Counsel, was wrong. Basically the appellant/first defendant says that he cannot be regarded as a trustee for his people under the English law concept of a trust. In support of his contention, Counsel relied on the cautionary view expressed by Daly CJ in Lilo & Anor -v- Ghomo [1980-1981] SILR 229 where at pages 233 & 234 the Chief Justice said:

"Before I turn to these grounds I must say something generally about the difficulties which have arisen. They arise, in my view, from what is always a problem in dealing with Customary Land Cases in the modern Solomon Islands. That problem is how can one express customary concepts in the English language? The temptation which we all face, and to which we sometimes give in, is to express these concepts in a similar manner to the nearest equivalent concept in the law received by Solomon Islands from elsewhere, that is the rules of common law and equity. The result is sometimes perfectly satisfactory in that the received legal concept and the Solomon Islands custom concept interact to give the expressions a new meaning which is apt to the Solomon Islands context.

It is thus with the use of word "trustees" which has arisen in this case. This word is used in Solomon Islands in the customary land context in a different way to its use in relation to the principles of equity elsewhere. However other concepts of received law have not developed a customary law meaning and the use of expressions which denote those concepts can produce difficulties of some complexity. This is particularly so- when the custom concepts which they are said to represent are themselves undergoing modification to fit them to the requirements of a changing Solomon Islands which is now concerned not only with the use of land for subsistence farming but with the sale of timber on land and enclosure of land for cattle and so on.

For this reason it is, to my mind, a great development of the system of dealing with customary land cases that we now have a Customary Land Appeal Court. That court, through the experience of the majority of its members in custom concepts and the legal experience of its magistrate member, has the ability to participate in the welding of customary concepts and the English language in a way which will not overlay the custom with inadequately modified expressions which in time could result in the custom giving way to inappropriate and possibly undesirable concepts of received land law."

I take it that the caution expressed by Daly CJ in that case concerned the application of legal concepts under received law in a customary situation, more, in the use of the English language to express a customary concept. I respectfully agree entirely with the concern expressed by Chief Justice Daly.

In the present case the appellant argued that he cannot be regarded as a trustee for his people in the matter concerning Ziata Land. If he is not a trustee, then what is he? I have already stated that the concept of trust is not known in customary law. However, even if the concept is unknown in customary law, can it be applied, in a customary law related situation, such as in customary land matters? My view is that the concept of trust can apply in such area provided that it is so applied not as a substitute but to accommodate the principles of custom already in existence on the subject matter. I said, not as a substitute since to apply it as such, say in customary land, would really be displacing the customary law governing the land concerned. So much so that in a customary land situation where land is owned by the tribe or clan, a representative of the landowning tribe is not a trustee. For he cannot hold the ownership title to the land on behalf of his tribe, unlike in general law, the trustee who holds Land on behalf of his tribe holds the legal title to the land and beneficiaries; are those for whom he holds the land on trust. Again a representative of a customary land owning tribe cannot be regarded as a trustee as such because he cannot deal with the customary land without the consent of the other members of the tribe. If he does so, his action can be impeached by the other members of the tribe, whereas a trustee under the received law can make an unimpeachable sale of land to a bona fide purchaser -without having to resort to the consent of the beneficiaries. In Nimp. -v- Rumants [1987] PNGLR 96 which was a case dealing with clan representatives who held shares in a property company set up to manage traditional lands. The Court had to make it clear that the sale of the company was effectively the sale of clan lands and as it took place without the consent of the clan members, the sale was impeachable. The position of a clan or tribe representative in Solomon Islands is in the similar position when dealing with customary land.

Whilst the concept of trust is unknown in customary law, and a representative of the customary land owning tribe is not a trustee as such, the concept can nevertheless be modified and be applied in the modern Solomon Islands. In strict traditional dealings in customary land, such as on the question of ownership or disposition of the land, the general law concept of trust cannot apply. However, we have now seen the trend of developments that are taking place on customary land in Solomon Islands and one such development is that with which we are now dealing in the present case.

The modification of the concept of trust might not be needed in the days when very little development took place on customary land. Today, there is in my view a need for the modification of the concept in order to apply it to certain dealings in customary land and to accommodate the customary jurisprudence applicable in such matter. Thus, while the general law concept of trust is not applicable in customary land, its principles, in my judgment, can rightly be applied in regulating the proceeds of sale of or dealings in customary land. This is of vital importance so as to ensure that there is a binding code of conduct between the tribal representative and his tribe particularly in terms of being accountable as a tribal representative in the management of the proceeds of the tribal land. It would clearly be unjust and inequitable to allow the tribal representative to deal with the proceeds of a tribal land in the absence of any concept of accountability.

While the tribal representative (sometime he is regarded as the tribal elder or "the big man") can argue that under customary law he cannot be called to account for his dealings with the tribal land and that the only remedy the other members of the tribe have against him is to call for his removal as the representative of the tribe, the Court must have the power to order the tribal representative to account in the interest of justice. There is no limit in the kind of cases where the Court can exercise its equitable jurisdiction to give a helping hand, as pointed out in the Nigerian case of Akande -v- Akanbi, reported in [1966] Nigerian Bar Journal, 86 and referred to in the book, Custom at the Crossroads, edited by Jonathan Alick and Jackson Rannels, Faculty of Law, UPNG (1995): "The Future of Customary Law in Papua New Guinea." In that case the Plaintiff sued the head of the family for an account of the proceeds of the sale of family property. The head of the family, relying on customary law, argued that in custom he could not be made to account for such proceeds being the head of the family and that the only remedy available to the younger members of the family was to remove him from his position as head of the family. It was held that the Court has power to make any order which is necessary to do justice, and if, in administering these principles, the Court finds itself in a position that it should order an account, it can do so effectively, notwithstanding the fact that the cause of action is in customary law, for equity imposes no limitation in the type of cases in which it will give a helping hand. To this effect, Somolu J. had this to say at page 90:

"... it is far better to impose restrictions on the heads of families by making them liable to account, even strict account, than to lay them open to temptation by unnecessary laxity in the running of family affairs which inevitably follows non-liability in that respect. To hold otherwise will be outrageous to our present sense of justice and will open the floodgate to fraud, prodigality, indifference or negligence in all its forms and cause untold hardships on several families especially the younger members. I can see no harm in making the accountability of trustees of properties held under customary law as strict as that of other types of trustees known to our law..."

So that while the trusteeship principles may not be applicable to system of the holding and disposition of customary land, it is very much an applicable concept, though in a limited way, to the management of the proceeds of the land, including the proceeds arising out of the sale or lease of the tribe's customary land. This trusteeship concept which to my mind stems, in the main, from equity rather than the common law concept of trust, must clearly be of vital importance in the way customary land is dealt with in today's money economy. It is essential in ensuring accountability on the part of those who take charge of family or tribal properties. If anything, it is my firm view that in today's changing conditions in the way customary land is used, the principles of accountability must be made to form part of the customary jurisprudence to be applied in determining the relationship and status of a representative who acts on behalf of his landowning tribe in customary land matters.

In the present case, the applicant/first defendant does not hold the land in question as a trustee for his tribe as he is only the representative of his landowning tribe and who cannot deal with the said land without the consent of the other members of his tribe. The resultant "Agreement For Lease of Customary Land" signed on 30 October 1997 was entered into between the applicant/first defendant and two others, as Lessors representing their tribes and the Commissioner of Lands. As signatories to the Agreement, these representatives received money from the Government as "access fee" to the land. The representatives will also be the ones who will be receiving premium and rental over the land. Be they access fee, premium or rental, those are benefit paid or to be paid by the Government through the representatives to their tribes for the use of the land. It must therefore follow, that the applicant/first defendant, as co-owners of the land with the other members of his tribe, received benefit for the use of the land. He cannot use that benefit for himself but must be used for the benefit of all those entitled to it, namely the members of the landowning tribe. He is in a fiduciary position where he is under obligation to account for all the money he received in that capacity. His position is therefore akin to that of a constructive trustee in which case the principles of such trusteeship can properly be applied in regulating the proceeds arising out of the use of the customary land in question. In this regard it is worth noting the words of Lord Wilberforce in NZ Netherlands Society -v- Kuys [1973]2 All ER 1222, at 1225 where the learned law Lord said:

"The obligation not to profit from a position of trust, or, as it is sometimes relevant put it, not to allow a conflict to arise between duty and interest, is one of strictness. The strength, and indeed the severity, of the rule has recently been emphasised by the House of Lords (Boardman v. Phipps). It retains its vigour in all jurisdictions where the principles of equity are applied. Naturally it has different applications in different contexts. It applies, in principle, whether the case is one of a trust, express or implied, of partnership, of directorship of a limited company, of principal and agent, or master and servant, but the precise scope of it must be moulded according to the nature of the relationship."

As clearly pointed out by Lord Wilberforce the general principles of equity can be applied in all jurisdictions but their precise scope of application differs depending on the circumstances of each case. The obligation not to profit from a position of trust together with the duty to account are, in my judgment, of vital importance to Solomon Islands in responding to the modern conditions under which customary land is being subjected to in our today's money economy. The absence of those obligations would be, as the Chief Justice of Ghana said in Re Hotonu (1889) 1 Journal of African Society 87, "unjust and inequitable."

Mr. Waleilia's contention is that the trust concept under the English common law is inappropriate to Solomon Islands circumstances and as such it cannot be applied here. I accept that in so far as ownership of customary land and as I have already said, the first defendant cannot be regarded as a trustee holding land in trust for his tribe. It would be wrong in customary law if he were to be regarded as such. In this regard, my respectful view on the Trustee Act 1925 of the United Kingdom is that, even if it is an Act of UK Parliament of general application and as such applies in Solomon Islands, it cannot be applied to customary land in terms of ownership and disposition of such land. Therefore the practice of representatives customary landowners entering into agreements with investors as trustees for the tribes is inappropriate and one that leads to confusion and unnecessary litigation in this area.

But the absence of customary law regulating the position of a trustee does not, in my view, necessarily exclude other principles of law and equity from applying to a situation where a representative in custom is placed in a position akin to that of a trustee. As Akande -v- Akanbi pointed out earlier, equity imposes no limitation in the type of cases in which it will give a helping hand. The principles I have discussed earlier in this judgment applies in this case.

The learned Registrar, in this case, regarded the first defendant as a trustee in his capacity as a representative of his tribe and who is the person determined by the acquisition officer to receive the benefit from the use of the tribe's land on behalf of his people. I do not think the learned Registrar was there equating the first defendant as a trustee in terms of holding land for his tribe, for that cannot be right. Rather the Registrar was clearly concerned with the status of the first defendant as a representative who was acquiring benefit from the use of his tribe's land and who, therefore, is under duty to account for all the benefit received in that capacity. In that regard the Registrar was right to regard him as a trustee who is in a fiduciary position and who is under obligation to account to his people for the money be had received from the Government.

Again, I accept the argument put on behalf of the first defendant by Mr. Waleilia that a trust cannot be readily implied under the Land and Titles Act. It must be created by express provisions of the Act. The authority for that proposition in this jurisdiction in this Trading Company (Solomons) Ltd -v- P.K.R. Pacific Sales Ltd [1980-1981] SILR 172. But in that case the Court was dealing with a different situation altogether than that with which we are concerned in the present case. That case was concerned with a registered land which was purchased by the defendant from Gubbay (New Hebrides). The defendant had the property registered in its name but the plaintiff claimed that the defendant held the properly on trust for it on the basis of a claim of prior rights to the land. The Court, however, dismissed the plaintiff's claim.

The Land and Titles Act is a legislation dealing with registered land and as such expressions used therein must be given meanings to accord with the purpose of the legislation rather than to reflect concepts used elsewhere in law and equity: see Trading Company (Solomons) Ltd -v- PKR Pacific Sales (supra). In this regard when one turns to the provisions of Div. 1 of Part V of the Land Titles Act, one is disposed to find that there is no mention of "trust" or "trustee" in those provisions. The expression used in those provisions is "duly authorised representative." This is in accord with the purpose of those provisions and the nature of the land affected. It would not be right to regard a representative of the landowning tribe as a trustee for the reasons which I have already mentioned earlier in this judgment. There is a world of difference between a "representative" of customary landowners and a "trustee" in terms of holding titles to land. I have already discussed this also earlier in this judgment and I need not repeat it here. Suffice to say that the two concepts are totally different when one is considering the question of ownership and disposition of land.

Thus the defendant is correct in saying that he is not a trustee for the purpose of holding the land in his name on behalf of his tribe. However, as he is the representative of his tribe, he received and will continue to receive the benefits on behalf of his tribe for the tribe's land. This is where accountability for his actions is of paramount importance.

This ground complains of the learned Registrar's finding that a trust is implied by virtue of the first defendant's status as a customary landowner representative. I have already dealt extensively with this point. For the reasons that I have already stated I find the first defendant not as a trustee holding land on trust for his tribe but a representative who holds money arrived from the use of the land on behalf of his tribe. It is in that latter capacity that he must be regarded as a trustee who must account to his tribe for his action.

The Court ordered the first defendant to produce an account of all the money he had received. He had not done so. In which case, I do not see any justification in law for him to complain of the learned Registrar's action in ordering discovery and inspection of documents relating to the money he had received. The learned Registrar was no more than taking steps to ensure the first defendant complied with the Order of the Court. Ground 1 of the appeal fails.

Ground 2

The first defendant's complaint under this ground is that the learned Registrar exceeded his jurisdiction when he issued the orders or directions on 16 August 1999. As I have already said earlier that the Registrar's actions were no more than taking steps to ensure the Order of this Court must be complied with by the first defendant. That order made on 14 May, 1999, required the first defendant to account for the money he received from the Government in respect of Ziata Land. He had not yet complied with it by August 1999 and when he came before the learned Registrar, he was reminded of it and pointed out to him that he was in contempt for not complying with the order of the Court.

Strictly, the leaned Registrar should have matter of contempt bought before the judge who would deal with it. But out of a sense of justice and giving the first defendant another chance to come to his senses, the learned Registrar ordered discovery and inspection of documents relating to the payments so far received. I think the first defendant must regard himself as fortunate to be given such a chance.

Then there is complaint that the learned Registrar was wrong to order discovery and inspection without regard to the Summons filed by the plaintiffs on 25 June 1999. That summons was dealt with by the learned Registrar on 4 August 1999 at which hearing all the parties were represented. The learned Registrar after hearing all the parties, ordered the first defendant to produce account of all the monies he received from the Government by the 9 August 1999 and that if no account was produced, to file an affidavit showing reasons for not being able to produce the account. The matter was adjourned to 16 August 1999. When the matter came before the learned Registrar again on 16 August 1999, the parties were represented and after heading counsel for the plaintiffs and first defendant, the learned Registrar ordered discovery of documents within two days; inspection, two days thereafter and ordered that if the first defendant refuses to comply with order of the Court made on 14 May 1999, he would be in contempt of Court and shall be arrested and brought before the Chief Justice to be dealt with his contempt. The learned Registrar gave the first defendant, 10 days to 26 August 1999, to comply with that part of the learned Registrar's order. The matter was further adjourned to 1 October 1999. On 17 August 1999 the first defendant applied to stay the order of the learned Registrar. On 18 August 1999 Mr. Justice Kabui ordered the stay of the whole of the order of the learned Registrar made on 16 August 1999 pending this appeal.

It would appear to this Court that the complaint that the learned Registrar did not have regard to the Summons filed by the plaintiffs on 25 June 1999 and that the learned Registrar deprived the first defendant of an opportunity to adequately respond to the issues relevant to the orders is without merit. The first defendant had been given all the opportunities he needed to do what the Court ordered him to do. Yet he is prepared to seize every opportunity to buy time in order to evade complying with the orders of the Court. This cannot be accepted and as I pointed out in Kim Kae Jun & Ors -v- DPP and Commissioner of Police, HC CC 423 of 1999 (judgment given on 20 December 1999) that those who seek justice, they too, must do justice. The Court must take a firm step to ensure that its orders are not flouted. In the circumstances of this case, Ground 2 must also fail.

Ground 3

This ground complaints of the learned Registrar's ciders as unjust and unreasonable especially in view of the time limits required for the discovery and inspection. The first defendant contented that he was not given "sufficient time" and "reasonable opportunity" to have access to relevant documents. The kindest thing that can be said about the first defendant in this regard is that he seems to have less than perfect understanding of what "sufficient time" and "reasonable opportunity" are to him, having been ordered by the Court on 14 May 1999, that is, three months before the learned Registrar made the order complained of in this case. The first defendant had known about the order to account since 14 May 1999 and he cannot now complain if he has been given one day or one hour to produce the documents showing the monies he had received. I see no merit in this point and Ground 3 must equally fail.

Conclusion and Order

All the grounds relied on by the first defendant fail and consequently the appeal is dismissed. All the orders sought by the first defendant are accordingly refused. The order made by his Lordship Mr. Justice Kabui on 18 August 1999 whereby the learned Registrar's order of 16 August 1999 was stayed is discharged.

The learned Registrar's Order of 16 August 1999 is confirmed but in the interest of justice I am prepared to exercise the Court's discretion to vary that Order in view of the Court vacation, Christmas and New Year periods. Accordingly the Order is varied as follows:

1. Discovery of documents by parties be done within 21 days from today.

2. Inspection 7 days thereafter.

3. The first defendant shall within 21 days from today call a meeting of the members of his tribe and his distribution committee to resolve the manner of distribution of monies (whether purchase money, rent or access fees) to the tribe by the Government in respect of Ziata Land. A copy of the minutes of that meeting or evidence thereof be filed in Court within 7 days after that meeting.

4. Paragraph 4 of the Order of 16 August 1999 is deleted.

5. The matter be fixed by the Registrar within 14 days after the total period stated in paragraph 3 above.

The learned Registrar's Order of 16 August 1999 is varied accordingly.

There will be a penalty notice to attach to this Order, that is to say, that failure to comply with this order will result in the first defendant being liable to contempt proceedings.

Order accordingly.

(Sir John Muria)
CHIEF JUSTICE