Taluomea v Lolo Ngalulu Development Corporation Ltd [2003] SBHC 113; HC-CC 002 of 2002 (25 July 2003)

HIGH COURT OF SOLOMON ISLANDS

Civil Case Number 2 of 2002

STEPHEN TALUOMEA AND OTHERS

V.

LOLO/NGALULU DEVELOPMENT CORPORATION LTD AND OTHERS

High Court of Solomon Islands
(Palmer J.)

Date of Hearing: 9th July 2003
Date of Judgment: 25th July 2003

G. Suri for the Applicant/Plaintiffs
A. Nori for the first, second and third Respondents/Defendants
Attorney-General for the fourth Respondent/Defendant

PALMER J.: This is an application for leave for Writs of Attachment to be issued against the first, second and third Respondents/Defendants (“the Respondents”) under Order 61 rule 21 of the High Court (Civil Procedure) Rules 1964 (hereinafter referred to as “the Rules”), for their contempts of court by failing to comply with the Orders of this Court dated 18^th January 2002, as varied on 3^rd April 2002 and re-affirmed by the orders contained in the Judgment delivered 8^th August 2002 (hereinafter referred to as “the Interim Orders”). Two affidavits have been filed in support; one by Walter Folotalu filed 6^th June 2003 and the other by Mike Wate filed 9^th July 2003. The Applicants/Plaintiffs (“the Applicants”) allege that four shipments have been made to date but only $89,985.01 paid into an interest bearing deposit trust account (“IBD Account”) held in the names of Parties Solicitors. They allege a lot more moneys should have been paid into the IBD Account. They also allege full particulars of the volume, specie of logs and areas of land from which logs had been extracted were yet to be disclosed.

The Applicants had filed Writ of Summons and Statement of Claim on 18^th January 2002. They had also filed on same date, an ex parte summons for interim orders inter alia to restrain Respondents from continuing with logging activities on Ngwalulu or Manaoba Island (hereinafter referred to as “Manaoba Island”). This application was heard on the same day and interim orders granted.

On 13^th February 2002, 1^st & 2^nd Defendants filed Notice of Motion to have the interim orders set aside. This was heard on 13^th June 2002 and judgment delivered on 8^th August 2002. The Interim Orders included auxiliary orders which required (i) the Defendants to pay the full FOB proceeds of all timber or logs cut into an IBD Account and (ii) the Respondents to provide full particulars of volume, specie of logs and specific land areas from which the Respondents had harvested the logs for export. These auxiliary orders had been imposed in conjunction to the restraining orders imposed against the felling, harvesting and export of logs on Manaoba Island. They were supposedly issued as a precautionary measure for purposes of keeping track of the logs felled and the proceeds of money received, pending determination of the triable issues before the court. In many instances, the only assets or funds that would have been available for distribution to competing landowners and claimants over payment of royalties, damages and costs were the proceeds from sales of those logs. It had also transpired in certain instances that once proceeds had dissipated it was almost impossible to recover anything and claimants left with nothing to fight for at the end of the day. In the absence of such auxiliary orders a plaintiff’s concern had always been the fear that at the end of the day he/she might not recover anything at all!

It was the use of such orders in interlocutory applications for injunctions requiring an account to be taken of moneys received from the sale of timber, and the control of moneys by the courts, that has come under heavy criticism recently in the judgment of Brown J. in Alex Lokopio and James Kamasi v. JP Enterprises Ltd, Letipiko Balesi and Ocean Trading Company^[1] (“Alex Lokopio’s Case”). At pages 2-3, his Lordship Brown J. said:

“This action, then, is beginning to be litigated by interlocutory application. Such applications are supposedly incidental to the principal object, a final judgment or order, but from a perusal of the nature of the applications by the plaintiff, they clearly seek to achieve the principle object without trial on the merits.

Since such orders are interlocutory, they, in a historical sense, seek (as one end) for the interim preservation of property. In this case the plaintiffs have pointed to the growing trees and have obtained interlocutory orders staying their felling. They have gone on however with a series of other orders which if granted in the manner of interlocutory motion, would effectively circumvent the fair hearing of the action.

To seek an account of moneys received from the sale of the timber, the control of moneys and an assessment of damages are matters which would not normally be countenanced in interlocutory proceedings before hearing of suit. So with these applications on foot, I took pause to reconsider my earlier injunction, for the process of the court may appear to be abused, if used for purposes over and beyond those countenanced.” (Emphasis added)

The purpose of such interlocutory orders was to preserve the status quo (the interim preservation of property) pending determination of triable issues before the court. Their existence should not unnecessarily halt proceedings or delay further action in this matter where triable issues are pending before this court.

Application

The orders on which this application for contempt of court action is based are the very type of orders, which came under criticism in Brown J.’s judgment referred to above. The rationale behind this criticism was that to ask for such orders in interlocutory proceedings was akin to seeking to achieve the principle object without trial on the merits. Until triable issues before the court had been determined and decision obtained in favour of the Plaintiffs, the Defendants were under no obligation to account to them for any moneys received from the sale of timber, which had been lawfully acquired under a valid licence! The mere establishment of sufficient interest and the existence of triable issues would not in interlocutory proceedings have entitled Plaintiffs to the issue of such auxiliary orders. This was what Brown J. referred to in his judgment, that: “To seek an account of moneys received from the sale of timber, the control of moneys and an assessment of damages are matters which would not normally be countenanced in interlocutory proceedings before hearing of suit.” His Lordship further warned that the issue of such orders might have resulted in the abuse of the process of the court.

In Alex Lokopio’s Case^[2], his Lordship Brown J. also pointed out that where a licence had issued and the time for appealing against the grant had long expired the court must presume that proper formalities for the grant and felling licence had been complied with. In such situations the legal maxims “omnia praesumuntur solemniter esse acta” (All things are presumed to have been done rightly) and “omnia presumuntur rite esse acta” (A prima facie presumption of the regularity of the acts of public officers exist until the contrary appears), would apply to this case. His Lordship held in that case that he had overlooked the application of those legal maxims and decided to reconsider his earlier orders. In so doing he concluded that it would not be in the interest of justice for the earlier orders issued on 1^st May 2003 to be continued and ordered that they be dissolved.

His Lordship further admonished that: “Where, after the licences have issued, there is disagreement amongst the tribe over logging, that disagreement cannot ground a cause of action to impugn the agreement and licence issued under the Act, once the time for appeal has expired. It is a disagreement amongst the tribe and should be resolved in the proper place, the Local Court.”

In the light of his Lordship’s criticisms in Alex Lokopio’s Case against the use of auxiliary orders, it is my respectful view that this court should now re-consider seriously the appropriateness of such orders on a case-by-case basis.

I take note of the criticisms of learned Counsel Mr Nori regarding due progress of this case. To a certain extent his criticism on delay is valid. The last proceedings were taken in June 2002 more particularly after judgment was delivered on 8^th August 2002. For the past 9/10 months no further step had been taken. I acknowledge, the Plaintiffs had not been idle in all that time; they had been pursuing claims to the “Land Courts” via the Chiefs Committees. But that is not excuse for not continuing with and expediting hearings on the triable issues identified before this court and which could be pursued independently of the land claims.

The Plaintiffs should not be sidetracked from the pursuit of the triable issues pending before this court. To grant leave now to pursue a contempt of court action would simply prolong determination of the outstanding issues and effectively circumvent the fair hearing of the action, to use the words of Brown J. The powers of this court being discretionary, for the reasons given above, I am not prepared to exercise my discretion to grant leave in this situation. Having reconsidered the auxiliary orders issued in the light of his Lordship’s judgment in Alex Lokopio’s Case, it is my respectful view that apart from the injunctive orders restraining the felling and extraction of logs on Manaoba Island, that part of the orders which required payment of the full proceeds of all timbers or logs removed from Manaoba Island into an interest bearing deposit account in the names of the Solicitors for the Plaintiffs and Defendants, and requiring an account of the volume, specie of logs and identification of the land areas from which the logs had been removed should be discharged with the exception only of 15% of the FOB value of the log proceeds pending determination of the triable issues in this action. This order is to be effective immediately. The effect of this order means that any moneys equal to the value of the 15% of all log proceeds (FOB value) currently injuncted, may not be released; anything beyond that is not subject to the restraining orders of this court. The Plaintiff however is at liberty to re-apply for the re-imposition of those orders where it is considered necessary in the interest of justice.

Application for leave to issue contempt of court action is denied. As pleadings are yet to close, the Plaintiffs should now consider the next step to be taken in the prosecution of its claim; costs in the cause.

ORDERS OF THE COURT:

1. Refuse application for leave.
   
2. Discharge orders in paragraphs 1 and 3 of the orders granted on 3^rd April 2002 with the exception of 15% of all FOB log proceeds to be paid into the same interest bearing deposit account.
   
3. Costs in the cause.
   

The Court.

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^[1] CC 245 of 2002, 19^th June 2003
^[2] Alex Lokopio and James Kamasi v. JP Enterprises Ltd, Letipiko Balesi and Ocean Trading Company, CC 245 of 2002, 19^th June 2003 at page 4 para. 2 per Brown J.