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High Court of Solomon Islands |
HIGH COURT OF SOLOMON ISLANDS
CIVIL CASE NUMBER 19 OF 2001
ISABEL TIMBER COMPANY LIMITED
-V-
HUHURANGI ENTERPRISES AND
MARVINGBROS TIMBER COMPANY LIMITED AND ATTORNEY-GENERAL
HIGH COURT OF SOLOMON ISLANDS
(PALMER J.)
HEARING: 4th May 2001
JUDGMENT: 14th June 2001
G. Suri for the Applicant/Defendant
A & H Lawyers for the Respondent/Plaintiff
PALMER J.: This is an application by the First and Second Defendants (“the Applicants”) by Notice of Motion filed 3rd April 2001 for the following declarations:
The Plaintiff (hereinafter referred to as “the Respondent”) had commenced action by Writ of Summons filed 26th February 2001. The Respondent claims against the First Defendant, inter alia, orders for specific performance of a Timber Rights Agreement (“the TRA”) entered into between the Respondent and the First Defendant dated 24th July 1991 (copy annexed as Exhibit “TSK1” to the affidavit of Teo Siak Kui filed 26th February 2001) and damages for breach of contract. Against the Second Defendant, the Respondent claims a permanent injunction restraining the Second Defendant from entering and felling and/or removing logs or timber from land known as LR 689, against the Third Defendant, damages for negligence and against all Defendants, inter alia, a declaration that the Timber Harvesting Licence No. A10023 granted to the First Defendant on 24th August 2000 was null and void and of no effect.
The Respondent had obtained a timber licence number TIM 2/32 (hereinafter referred to as “the Timber Licence”) issued by the Commissioner of Forest Resources (“the Commissioner”) on 29th October 1991 (copy annexed as Exhibit “TSK3” in same affidavit of Teo Siak Kui). The claim of the Respondent in this action in essence hangs on the validity of the TRA and the Timber Licence over parcel number 089-002-2, also known as LR 689 (hereinafter referred to as “LR 689”).
The First Defendant on the other hand relies on a separate Timber Harvesting Licence number A10023 (hereinafter referred to as “the THL”) (copy annexed as Exhibit “LCK3” to affidavit of Ling Chung Kok filed 1st March 2001”) issued also by the Commissioner in respect of the same land, LR 689. The Second Defendant is the logging contractor engaged by the First Defendant under a technology agreement entered into on 16th May 2000 (“the TA”) to carry out the actual logging operation on LR 689. The Second Defendant has commenced operations hence giving rise to this case.
There are in existence two timber licences over the same land, LR 689; one held by the Respondent (the Timber Licence) and the other by the First Defendant (the THL). There are also two agreements in place; the TRA and the TA. The Applicants say in their defence inter alia, that the TRA relied on by the Respondent is legally flawed and therefore void ab initio. This is the substance of this Notice of Motion made pursuant to Order 27 Rule 2 of the High Court (Civil Procedure) Rules, 1964 (“the Rules”). Rule 2 reads:
“Any party shall be entitled to raise by his pleading any point of law, and any points so raised shall be disposed of by the Court at or after the trial, provided that by consent of the parties, or by order of the Court on the application of either party, the same may be set down for hearing and disposed of at any time before the trial.”
The points of law raised by the Applicants are contained in paragraph 2(a) - (g) of their Defence filed 28th March 2001. These have been summarized in the declarations sought in this Notice of Motion.
The Forest Resources and Timber Utilisation Act [Cap. 40] (“the FRTUA”) deal with applications from interested persons for timber licence and acquisition of timber rights over inter alia, any land not being customary land or public land (para. 5(1)(b)) and any customary land (para. 5(1)(c)). The land (LR 689) the subject of the dispute is not customary land. It is registered land. It was registered sometime in April 1974 under the Land and Titles Act [Cap. 133] (“the LTA”). Part III of the FRTUA therefore does not apply to LR 689. This is the part which sets out the procedure for acquisition of timber rights over customary land. Had the Respondent been vigilant in 1991, it would have realized that dealing with this land would have been one of the easiest under the said Act. It would not have needed to go through the long-winded and complicated process set out in section 8 of the FRTUA for purposes of identifying the persons lawfully entitled to grant timber rights over LR 689. That had conveniently been done for the Respondent under the LTA. All that the Respondent needed to do would have been to obtain a profit under section 181 of the LTA; not a timber rights agreement with the joint owners of LR 689. A profit is defined in section 2(1) of the LTA as:
“ ‘a profit’ means a right to go on the land of another to take a particular substance from that land, whether the soil or the products of the soil, and includes the taking of wild animals”.
Black’s Law Dictionary, sixth edition also defines it as:
“A right to take from the soil, such as by logging, mining, drilling, etc. . . . a right to make such use of the soil of another, such as a right to mine metals, and it carries with it the right of entry and the right to remove and take from the land the designated products or profit and also includes the right to use such of the surface as is necessary and convenient for exercise of the profit.”
A grant of timber rights therefore comes under a grant of a profit and any person wishing to acquire timber rights over LR 689 would have to obtain a profit under the LTA before applying for a timber licence from the Commissioner.
The process by which a profit is acquired obviously is governed by the LTA. Paragraph 200(2)(a) sets out one of the crucial requirements in the disposition of any interest where there are two or more joint owners. I quote:
“Where two or more persons are joint owners of a registered interest in land -
(a) a disposition of the interest shall be made only by all the joint owners;”
The requirement is mandatory. In order for any disposition to be valid for registration and clothed with the cloak of indefeasibility under the Act, such disposition would have to be made by all the joint owners. What this meant is that any instruments executed must contain the signatures of all the joint owners. Further, the LTA sets out other requirements to be complied with. Subsection 181(1) requires the grant of a profit to be in prescribed form. I quote:
“(1) The owner of an estate or a registered lease may, by an instrument in the prescribed form, grant a profit.”(emphasis added)
The prescribed form is set out in Form 12 (page 4914 of Vol. VII of the Revised Edition 1996 Laws) of The Land and Titles (General) Regulations. Not only that, paragraph 181(3)(a) requires the grant to be registered as an encumbrance.
“(3) The grant of a profit shall be completed -
(a) by its registration as an encumbrance in the register of the interest to which it burdens;”
Finally, before any disposition is made, section 195(3) requires the execution of a statutory declaration in public that the beneficial owners had been consulted and that those in favour of the disposition are entitled to the major portion of the beneficial interests in that disposition. I quote:
“. . . no disposition of the interest shall be registered unless there is similarly produced to the Registrar a statutory declaration made in public by each of the joint owners that the persons beneficially interested have been consulted and that those of such persons in favour of the disposition of the interest are entitled to the major portion of the beneficial interests in the said interest of which the disposition is sought to be registered.”
It is significant that compliance with this requirement would have protected the interests of the beneficial owners of LR 689, in this case, members of the Makara Tribe, in that before the joint owners would have been empowered to sign any instrument purporting to grant a profit, they would have had to get consent of at least the majority of members of the Makara Tribe. Compliance with the above requirements would have been crucial to the validity of any profit sought to be relied on by any logging operator. Once a profit had been obtained the next step would have been to apply for a timber licence under section 5 of the FRTUA. It is not in dispute, the TRA failed to comply with any of the requirements set out under the LTA.
The Applicants’ Submissions
The Applicants’ submissions focus solely on the requirements set out in section 200(1)(a) of the LTA. However, as pointed out above that was only one of the requirements set out in the LTA. There were numerous other requirements, which a person seeking to rely on a profit had to comply with.
The Respondent’s Submissions
The Respondent concedes the TRA was not executed by Ben Bao; the other surviving joint owner over LR 689. It also conceded that at time of signing of the TRA, 24th July 1991, Ben Bao and Simon Haile were the only surviving joint owners. In spite of this flaw, the Respondent submits that the Applicants are time barred from raising such claims under section 5 of the Limitation Act [Cap. 18]. Section 5 provides:
“Except as otherwise provided in this Act, no action shall be brought, nor any arbitration shall commence, after the expiration of six years from the date on which the cause of action accrued.”
In its reply, the Applicants focus on the meaning of the word “action”. They argue that what is barred under section 5, are actions defined under the Limitation Act. Section 2 defines “action” as
“means an original proceeding that lies in a court under any law for the enforcement of a legal right, or for the redress of any legal wrong or legal injury or breach of a legal duty, or for any other legal relief and includes-
(a) an action as defined in the Rules of Court; or
(b) a suit as defined in the Magistrates’ Courts Act,
but shall not include a criminal proceeding;”
Order 1 Rule 1 of the Rules, defines an “action” as “means a civil proceeding commenced by writ or in such other manner as may be prescribed by rules of court, but does not include criminal proceeding by the Crown ”. The Applicants seek to submit that the application made cannot be described as an original proceeding nor that commenced by writ or such other manner as may be prescribed by the rules. The application rather is an interlocutory application made under Order 27 Rule 2 of the Rules and does not fall within the definition of “actions” contemplated by the Limitation Act or the Rules.
Is the Notice of Motion filed 3rd April 2001 an “action”?
Section 5 of the Limitation Act refers to an “action” as an original proceeding commenced in a court of law for legal redress or legal relief. The Notice of Motion of the Plaintiff in my respectful view cannot qualify as an original proceeding. It is an interlocutory proceeding as correctly submitted by learned Counsel for the Applicants. The definition of an “action” however includes the definition provided by the Rules. Order 1 Rule 1 refers to an action as a civil proceeding commenced by writ or in such other manner as may be prescribed by the rules of court. In my respectful view, the crucial word there is the word “commenced”. It governs the words “in such other manner as may be prescribed by rules of court”, apart from which they would be nonsensical. An action therefore includes any other civil proceeding commenced in such other manner as prescribed by rules of court. There are various ways an action may be commenced under the Rules. The most common way is by Writ of Summons (Order 2 of the Rules). In Vol. 1 of Halsbury’s Laws of England 3rd edition an action is defined as:
“a proceeding by which one party seeks in a court of justice to enforce some right against, or to restrain the commission of some wrong by, another party. More concisely it may be said to be “the legal demand of a right,” or “the mode of pursuing a right to judgment”. It implies the existence of parties, of an alleged right, of an alleged infringement thereof (either actual or threatened), and of a court having power to enforce such a right.”
In Stroud’s Judicial Dictionary of Words and Phrases 4th edition, Vol 1 A-C, an “action” is further defined as:
“This is a generic term, and means a litigation in a civil court for the recovery of individual right or redress of individual wrong, inclusive, in its proper legal sense, of suits by the Crown (Bradlaugh v. Clarke, 8 App. Cas. 354; and also judgment of Brett, M.R., in A.-G. v. Bradlaugh, [1886] UKLawRpKQB 9; 14 Q.B.D. 667).
In Cairns C. Bernard, Australian Civil Procedure, second edition, 1985 at page 3-4 cited by learned Counsel for the Applicants, it is defined thus:
“This notion is imported into both the rules of court and the enabling legislation. The term has a meaning, different in each case, in legal terminology, and by statute. In the former context it has been said to be a generic term which comprehends all legal proceedings, civil, criminal, and by the Crown. Used in that sense, it contemplates the existence of a right, an infringement of that right by another party, and a court competent to adjudicate on, and enforce a remedy, in respect of the infringement. Such a wide meaning is not given to the term in supreme court procedure. There the statutory meaning is accorded it. In that sense it means a civil proceeding commenced by writ of summons.”
The definitions quoted above are consistent with the definition of an action as having been commenced by writ of summons. To that extent, the Notice of Motion in this case cannot be regarded as an action.
There are other ways however a civil proceeding may be commenced under the Rules. A proceeding commenced by originating summons for instance, falls within the definition of an “action” under the Rules (Order 57 of the Rules) (Re Fawsitt, Galland v. Burton [1885] UKLawRpCh 182; (1885), 30 Ch. D. 231, C.A.; RE Vardon’s Trust (1885), 55 L. J. Ch. 259, C.A.; Gee v. Bell [1887] UKLawRpCh 91; (1887), 35 Ch. D. 160. In the Australian case Parkin & Cowper v. James [1905] HCA 64; (1905) 2 CLR 315 at 342, it was held ‘A proceeding by originating summons is manifestly a civil proceeding between parties which is commenced otherwise than by writ, but in a manner prescribed by Rules of Court. It is therefore an “action” ’; see also the New Zealand Case, Auckland Society for the New Church v. Public Trustee [1955] NZLR 561 at 562, per Shortland J). So too are proceedings for the grant of prerogative writs and applications for orders of certiorari (Order 61) (R. v. Westminster Assessment Committee [1971] 2 K.B. 215; Roberts v. Battersea Metropolitan Borough (1914), 110 L.T. 566, C.A.). There are other proceedings however which have not been held to be actions. These include an interpleader summons (Hamlyn v. Betteley, [1880] UKLawRpKQB 67; 6 Q.B.D. 63, C.A.; Collis v. Lewis [1887] UKLawRpKQB 227; (1887), 20 Q.B.D. 202; De La Rue v. Hernu, Peron And Stockwell, Ltd., [1936] 2.K.B. 164, C.A.); a garnishee proceeding (Mason v. Wirral, [1879] UKLawRpKQB 38; 4 Q.B.D 459); proceedings on a petition (Re Wallis, 23 L.R. Ir. 7); and counterclaim and set-off (Kinnnaird (Lord) v. Field, [1905] 2 Ch. 361, at p. 370, C.A.; but not under s 2 of the Bills of Exchange Act 1882 and Rights of Light Ct 1959, section 7). The definition of an action in this context must be confined to that given in the Limitation Act and the Rules. In my respectful view, the Notice of Motion of the Applicants under Order 27 Rule 2 is not an action and therefore section 5 of the Limitation Act does not apply.
Estoppel by Conduct / Representation
The second ground relied on by the Respondent was estoppel by conduct or representation. The classic statement of the principle governing estoppel by conduct or representation was made by Spencer-Bower in Hopgood v. Brown [1955] EWCA Civ 7; [1955] 1 All ER 550 at p. 559:
“. . . where one person (“the representor”) has made a representation to another person (“the representee”) in words or by acts or conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive), and with the result of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, or attempting to establish by evidence, any averment substantially at variance with his former representation, if the representee, at the proper time, and in the proper manner, objects thereto.”
In ‘Cross on Evidence’, at paragraphs 3.58 - 3.63, the learned Author spells out certain limits on the application of the doctrine of estoppel. One of these universal requirements is that the estoppel must concern an existing state of facts. Jorden v. Money (1854) 5 HL Cas 185 conclusively established that there could be no common law estoppel founded on a statement of future intention (see also Reed v. Sheehan [1932] ArgusLawRp 63; (1982) 39 ALR 257 (FCA)). See also the statement of Jordan CJ in Franklin v. Manufacturers Mutual Insurance Ltd [1935] NSWStRp 62; (1935) 36 SR (NSW) 76 at 82, where his Lordship sets out the ingredients of estoppel by representation. I quote:
“The type of estoppel which became definitely established in the common law by the case of Pickard v. Sears (1837) . . . depends upon different principles. In order that this type of estoppel may arise, it is necessary that (1) by word or conduct, (2) reasonably likely to be understood as a representation of fact, (3) a representation of fact, as contrasted with a mere expression of intention, should be made to another person, either innocently or fraudulently, (4) in such circumstances that a reasonable man would regard himself as invited to act upon it in a particular way, (5) and that the representation should have been material in inducing the person to whom it was made to act on it in that way (6) so that his position would be altered to his detriment if the fact were otherwise than as represented.”
Ingredient (3) above reiterates the importance of the representation based on an existing fact as contrasted with a mere expression of future intention (see also Caine v. Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64; (1920) 28 CLR 305 at 324).
Representation or conduct relied on by the Respondent
These can basically be summarized into two categories. The first category consists of the conduct of James Tikani (“Tikani”) in approving and consenting to the commencement of logging operations by the Respondent in 1997 over LR 689. This was based on the premise that Tikani was the duly authorized representative of the joint owners in LR 689 (see Exhibit “CCM1C” annexed to the affidavit of Chan Chee Min filed 6th March 2001). Exhibit “CCM1C” is a copy of the letter dated 20th October 1995 in which it was claimed authority in custom was granted to Tikani to deal with the Respondent concerning the logging operations intended to be carried out in LR 689. It appears the Respondent relied on that delegation of authority and commenced logging operations in 1997.
The second category is the numerous requests for funds, goods and assistance made by Tikani from the Respondent purportedly on the pretext that a supplementary agreement would be signed. The Respondent submits that the conduct and various representations by Tikani had estopped the Applicants from relying on the invalidity of the TRA as a defence to its claim. Unfortunately there is a fundamental flaw in the submissions of the Respondent. The so-called conduct and representations sought to be relied on by the Respondent as leading it into signing the TRA occurred well after the signing of the TRA in 1991. Those conduct and representations occurred in 1995 and 1997 thereafter. They couldn’t therefore have led the Respondent into executing the TRA. It is an impossibility. What the Respondent in actual fact seeks to submit to this Court it seems is that, whilst the TRA had been legally flawed, the subsequent conduct and representations had estopped the Applicants from denying the invalidity of the TRA. Unfortunately, that is erroneous. The doctrine of estoppel cannot be used as a sword, only a shield. It also cannot be used to found an action. See classic statement of Bowen LJ in Maritime Electric Co v. General Dairies Ltd [1937] UKPC 16; [1937] AC 610 (PC) at 620:
“Estoppel is only a rule of evidence; you cannot found an action upon estoppel. Estoppel is only important as being one step in the progress towards relief on the hypothesis that the defendant is estopped from denying the truth of something which he has said.”
If the Respondent is relying on the existence and validity of the TRA as binding on the Applicants, then it is obliged to provide evidence of the conduct or representations made by the First Defendant which led it into signing the TRA in 1991. That unfortunately the Respondent had failed to do.
It is pertinent to note as well that neither Tikani nor Deborah Turapago were signatories to the TRA and so could not in any event by conduct or representations have led or induced the Respondent into signing that invalid TRA. There is no such evidence before this Court. The only evidence adduced and relied on has been of conduct and representations occurring since the signing of the TRA.
Another limitation raised by learned Counsel for the Applicants and which I accept also applies to the circumstances of this case is that an estoppel cannot be relied on if the result of giving effect to it would be something that is prohibited by the law (Cross on Evidence (ibid) at paragraph 3.61; Roma Electric Light & Power Co Ltd v. Hair [1955] St R Qd 311; North West County District Council v. J I Case (Aust) Pty Ltd [1974] 2 NSWLR 511; Commonwealth of Australia v. Burns [1971] VicRp 100; [1971] VR 825 at 830; Considine v. Citicorp Australia Ltd [1981] 1 NSWLR 657). Giving effect to the doctrine of estoppel in the circumstances of this case would be to do something that is prohibited by law; namely, to validate an invalid TRA. That with respect cannot be permitted by this Court. The result is that the claim of estoppel relied on must fail.
Conclusion
Registered land as opposed to customary land is governed by the LTA. I see no conflict with the provisions of the FRTUA where the question of a grant of a profit and issue of a timber licence are entailed. I have sought to explain and set out in this judgment what should have happened in the circumstances of this particular case. The Respondent would have had to obtain a profit under the LTA first before applying to the Commissioner under section 5 of the FRTUA for a timber licence. It is obvious this procedure had been totally ignored. Ignorance however is no defence to the law.
Orders sought
The first order sought was for a declaration that the Plaintiff’s Timber Rights Agreement dated 24th July 1991, over LR 689 was executed contrary to section 200(2)(a) of the LTA and as such was invalid and unenforceable in respect of the said land. This must be answered in the affirmative but with the additional points that the TRA also did not comply with subsections 181(1) and (3) and subsection 195(3). In order for the TRA to amount to a grant of a profit to the Respondent it had to comply with the above statutory requirements. It failed to measure up and must be declared invalid and unenforceable. The Timber Licence issued in respect of that TRA over LR 689 by the Commissioner as a consequence should also be declared invalid.
The second order sought was for a declaration that the non-registered persons named in the TRA, Edmond Fina, Peter Kodere, Edmond Mare, Veronica Judy and Allan Rerena did not have the legal power or authority to sign the said agreement on behalf of the registered owners of LR 689. This must also be granted. Powers of Attorney are specifically provided for under section 207 and 208 of the LTA. The persons named above do not have powers of attorney to dispose of any interest in LR 689. The TRA accordingly is also defective on that basis and ought to be set aside.
The third order sought should also be granted. LR 689 is not customary land as defined under section 2(1) of the LTA and therefore any delegations of power and authority whether in custom or not for purposes of disposing any interest in LR 689 must be done in accordance with the provisions of the LTA. Finally the Applicants seek order to have the Writ and Statement of Claim of the Respondent struck out as disclosing no reasonable cause. This is a consequential order based on the premise that the validity of the TRA is the substance of the Respondent’s claim. Its invalidity virtually disposes of the Respondent’s claim and accordingly must result in the consequential dismissal of its claim.
ORDERS OF THE COURT:
The Court.
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