Somana v Isabel Timber Company Ltd [2000] SBHC 86; HCSI-CC 32 of 2000 (3 April 2000)

CC 32, 2000, HC

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No 32 of 2000

DAVID LENGA SOMANA

V

ISABEL TIMBER COMPANY LIMITED

High court of Solomon Islands
(Palmer J.)

Civil Case No 32 of 2000

Hearing: 23 March 2000
Judgment: 3 April 2000

C. Ashley for the plaintiff
P. Tegavota for the defendant

PALMER J.: This is an application by Summons filed 7th March 2000 for the following orders:

“1. That the Defendant be required under Order 16 to file and deliver to the Plaintiff’s solicitor an account of all trees felled, removed and sold from LR 674 within 7 days; and

2. That the Defendant’s defence be struck out under rule 4 of Order 27 on the ground that the Deed dated 30 August 1999 between one Eastern Development Enterprises Limited and the Defendant amounted to an Assignment of the Plaintiffs rights by the Defendant; and

3. That the Defendant forthwith pay into Court or to the Plaintiff the amount of $200,000.00 it received under the Deed dated 30th August 1999; and

4. Judgment be entered for the Plaintiff for breach of contract and damages to be assessed; and

5. The Defendant to pay the Plaintiff’s on an indemnity basis.

6. Any further order the Court deems fit to make.”

The Plaintiff (hereinafter referred to as “David Somana”) claims he is the representative of the Eti Eti Clan which owns the timber rights in Fufuana Land, also known as LR 674 on Isabel Island. Part of LR 674 and which is the subject area in dispute in this case, is the area stretching from Pigi to West Bank of Fufuana River. David Somana relies on a timber rights agreement executed on 21st July 1991 (herein after referred to as “the Agreement”) on behalf of his clan, which granted timber rights to the Defendant in respect of LR 674 (see Exhibit “CKA 1” annexed to the affidavit of Charles Ashley filed 7th March 2000). It was a term of that Agreement (Clause 39) that the rights and obligations comprised in that Agreement were not to be assigned without the prior written consent of the representatives. I presume David Somana claims to be one of those representatives. The other representative is I think Alfred Peoko. It is alleged the Defendant had breached that term and caused David Somana’s clan to suffer losses. The Defendant on the other hand, denies in its Statement of Defence filed 24th February 2000, that it had assigned its rights under the Agreement to Eastern Development Company Limited (herein after referred to as “EDE”).

Background Facts.

It is not in dispute a Deed of Settlement (herein after referred to as “the Deed”) was executed between Isabel Timber Company Limited (hereinafter referred to as “ITC”) and EDE, on or about 30th August 1999 (see Document No. 2 in Exhibit “CKA 6”). That Deed preceded the signing of a consent order dated 31st August 1999, in which ITC’s action in Civil Case 56/99 inter alia, was formerly withdrawn (see Document No.1 in Exhibit “CKA 6”). ITC had taken action against EDE in CC 56/99 on the ground inter alia, that it had an exclusive licence and timber rights agreement over LR 673. LR 673 was known in custom as Paehena Land. Paragraph 3 of the Statement of Claim filed on 17th February 1999, in CC 56/99 states:

“The Plaintiff holds a current timber rights licence over that area of land on Isabel Island in the Isabel Province known as LR 673 (“concession” – the licence reference number is Tim 2/32).”

The boundaries of LR 673 were identified as stretching from Varagia to Pigi (see affidavit of Sir Dudley Tuti filed 22 March 1999 at paragraph 6; and affidavit of Teo Siak Kui filed on 17 February 1999 at paragraph 3, Exhibit “TSK 3” in which the boundaries of LR 673 were clearly demarcated). Persons identified as entitled to grant timber rights over LR 673 were John Uluhoru, Alice Madevehe and Elsie Koitoke (see Exhibits “DT 6” and “DT 7” annexed to the affidavit of Sir Dudley Tuti filed 22 March 1999 in CC 56/99).

ITC also relied on the same timber rights agreement dated 21st July 1991, for the timber rights concession over LR 673 (see Exhibit “TSK1” annexed to affidavit of Teo Siak Kui filed on 17th February 1999 - CC 56/99). Note David Somana relied on that timber rights agreement as the agreement over which timber rights had been granted to ITC over LR 674, in particular the area stretching from Pigi to West Bank of Fufuana River. I have had the opportunity to scrutinise that agreement carefully but unable to find any signatures of David Somana or Alfred Peoko, the persons identified as entitled to grant timber rights over LR 674. There is a list which contains their names as the persons entitled to grant timber rights over LR 674, but no signatures appended to that document. This raises a big question mark as to whether any timber rights actually were granted over LR 674 or not. It should be noted that the affidavit evidence in support of ITC’s claim in CC 56/99 point more to a timber rights agreement obtained over LR 673 than LR 674, though I accept it may have also been assumed that it had timber rights concession over LR 674. The documentary evidence however is lacking.

The defence of EDE in CC 56/99 was that they also had a valid timber rights agreement over L.R. 673. The boundaries of L.R. 673 as claimed by EDE were defined as stretching from Varagia to West Bank of Fufuana River (see Exhibits “LSW 2” and “LSW 5” annexed to the affidavit of Luan Sing Wong filed on 23 February 1999 in CC 56/99). It will be noted this now included part of LR 674, the area stretching from Pigi to West Bank of Fufuana River. It would seem that ITC had claimed timber rights over LR 673 from John Uluhoru, Elsie Koitoke and Alice Madevehe, whilst timber rights for LR 674 from David Somana and Alfred Peoko. The two timber rights agreements relied on by EDE were executed on 29th May and 7th November 1995 respectively. Persons who signed those two agreements included John Uluhoru, Elsy Koitoke and Madevehe. These were the same persons who also signed the agreement granting timber rights to ITC in respect of L.R. 673 as defined from Varagia to Pigi. The significance of EDE’s defence is that, whilst it had opted to enter into a deed of settlement with ITC over their claims and counter-claims over LR 673 and LR 674, it at no time admitted liability under the said Deed (see clause 5 at page 2 of the Deed of Settlement) .. This has bearing to the claim made by David Somana in this case (CC 32/2000), in that by not admitting liability, in spite of the payment of $200,000.00 to ITC, it was indirectly saying that it did not concede any assignment took place. ITC also takes the same view as is evident in the denial made of the allegations of assignment against it. The issue therefore of the validity of their respective timber rights agreements over LR 673 and part of LR 674, had never been determined. This meant the defence raised by EDE in CC 56/99, that its logging activities over the area stretching from Pigi to West Bank of Fufuana River (part of LR 674) were based on what they claim as a valid timber rights agreement granted to them by the representatives of the Etingi Clan, had never been tested or tried in a court of law. The conclusion to be drawn from this is that it places the issue of assignment a triable issue.

It is arguable whether the Deed can be construed as amounting to an assignment of rights by ITC to EDE, because even without the Deed itself, EDE would still argue that it had valid timber rights agreement and licence to carry out logging activities over the area from Pigi to West Bank of Fufuana River. It is not in dispute trees had been felled and removed from part of LR 674 by EDE and not ITC.

The main issue in this action will turn on the construction of the Deed, whether there had been assignment or not. There are however two parties to this Deed, ITC and EDE. Only ITC had been sued. It seems to me to be unfair to EDE that as a party affected by the allegations of David Somana it would not have opportunity to be heard and to make submissions. I have already pointed out the possible defences of EDE based on what it said in its defence filed in CC 56/99. David Somana therefore might have to consider possible claims of trespass and or conversion against EDE. As for ITC if the question of assignment goes in its favour, then that would be the end of the matter.

David Somana’s claim therefore in my respectful view must necessarily include EDE as one of the Defendants in this case. David Somana it seems would also have to consider joining John Uluhoru, Elsy Koitoke, Uleen Sipunaru, Madevehe, Annettee Ilu, and Casper Bana as third defendants, as they were the persons who signed the timber rights agreement with EDE over the concession area stretching from Varagia to West Bank of Fufuana.

The orders sought accordingly can be answered as follows. The order sought under paragraph 1 of the Summons requiring the Defendant to file and deliver an account of all trees felled, removed and sold from L.R. 674 within 7 days should be denied. The Defendant denies and it is not in dispute, felling and removing any trees from Pigi to West Bank of Fufuana (part of LR 674). As pointed out, EDE had already indicated in CC 56/99 that they had defence of a timber rights agreement and licence issued in respect of that area of land (a copy of that licence No. TIM 2/78 is marked Exhibit “LSW 1” annexed to the affidavit of Luan Sing Wong filed 23 February 1999 in CC 56/99).

The second order sought was to have the defence of the Defendant struck out on the ground that the Deed of 30th August 1999 between EDE and ITC amounted to an Assignment of the Plaintiff’s rights by the Defendant. This submission assumed that there can be no defence raised to the question of assignment. Unfortunately that is not correct. As pointed out in this judgment, the question whether the Deed amounted to an assignment is arguable. It is a matter best left for trial. The order sought here must also be denied.

The third order sought required the Defendant to pay into Court the amount of $200,000.00 being the amount received under the Deed. With respect I fail to see any basis for granting this order. The Statement of Claim sought inter alia, damages for breach of contract and lost benefits. These are matters which can be addressed if and when judgment should be awarded in favour of the Plaintiff. It has not been shown the Defendant would not be able to pay for any damages that might be awarded against it or that it has no substantial assets in Solomon Islands.

The fourth order for judgment to be entered against the Defendant cannot be granted. Summons of the Plaintiff is dismissed with costs. As to the Summons of the Defendant filed 15th March 2000 seeking joinder of EDE as second defendant in this case, I am satisfied this is necessary to enable the Court effectually and completely to adjudicate upon the issues raised in the claim of the Plaintiff.

ORDERS OF THE COURT:

1. DISMISS SUMMONS OF THE PLAINTIFF FILED 7TH MARCH 2000.

2. JOIN EASTERN DEVELOPMENT ENTERPRISES LIMITED AS SECOND DEFENDANT IN THIS ACTION.

3. PLAINTIFF TO BEAR THE COSTS OF THE DEFENDANT.

4. ANY AMENDED STATEMENT OF CLAIM TO BE FILED WITHIN 7 DAYS.

THE COURT