Agassi v Watts [2005] SBHC 1; HCSI-CC 043 of 2004 (14 January 2005)

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case Number 43 of 2004

ALAN AGASSI AND HARRINGTON LOGARA, JOHNSON POGHOSO AND RAEBOY LOGARA (REPRESENTING GETU TRIBE)

V.

ISAAC WATTS, DARCY TIMOTHY AND JOHN TIMOTHY
(FIRST DEFENDANTS),

HUGHO JAMAKOLO, KEVU SAM AND TONY JAMAKOLO
(SECOND DEFENDANTS),

BULO ENTERPRISES
(THIRD DEFENDANT),

PACIFIC METRO LIMITED
(FOURTH DEFENDANT),

COMMISSIONER OF FOREST
(FIFTH DEFENDANT), AND

WESTERN PROVINCIAL GOVERNMENT
(SIXTH DEFENDANT).

High Court of Solomon Islands
(Palmer CJ)

Date of Hearing: 7^th December 2004
Date of Judgement: 14^th January 2005

Bridge Lawyers (A. Nori) for the Plaintiffs
Pacific Lawyers (C. Hapa) for the first, second and third Defendants
G. Suri for the fourth Defendant
R. Firigeni for the fifth Defendant
No appearance by the sixth Defendants

Palmer CJ: By orders issued 18^th October 2004, this court made orders inter alia restraining any further felling and export of logs from Bili Islands (which included Japuana, Karujeu, Saneihulumu and Mijanga customary lands) and directed that all proceeds obtained were also to be restrained. Following an application for variation held on 27^th October 2004, the orders of the court of 18^th October 2004 were varied to allow the fourth Defendants to remove for sale all felled logs although the proceeds continued to be subject to restraining orders apart from any Government export duty.

On 7^th December 2004 this court heard further application by the fourth Defendants for the release of the following payments:

(a) The fourth Defendant’s contract fee of 60% of FOB sales value under its Management and Technology Agreement;

(b) Alternatively, the reasonable costs as certified by Goh and Partners, a public accounting firm; and

(c) The appropriate Government’s export duty.

The fourth Defendants rely on the submission that their rights arise from the technology agreement dated 5^th February 2003 entered into with Bulo Enterprises the third Defendant (see annexure “ML2” attached to the affidavit of Michael Lam filed 9^th March 2004), which gave them right to enter fell and remove logs for export. They argue they have done so on the existence of a valid licence. They say they are therefore entitled to be paid under the terms of that Technology Agreement.

Balanced against that is the possibility that the said technology agreement could be rendered null and void should the Plaintiff win his claims of ownership over the said Islands. This raises the relevant question whether the court has right to interfere with such agreement at this juncture by restraining payments due to the fourth Defendant? In this particular instant the answer respectfully must be no. The reason being, that the Plaintiff’s claims as against the first, second, third and fourth Defendants primarily lie in damages for trespass and conversion. If the Plaintiffs should win their claims of ownership in custom over the Bili Islands, they will be entitled to claim for damages for trespass and conversion against the above mentioned four Defendants. The fourth Defendant however may be able to claim reimbursement for any orders of damages made against it from the third Defendant. Whether the third Defendant would be in position to pay up though is another question. Until the issues in custom are finally determined as between the Plaintiff and first and second Defendants and until the timber rights agreement and timber licence have been declared null and void, the technology agreement subsists. Any payments due to the fourth Defendants accordingly should be released. The reason being, that if the Plaintiffs should succeed in their claims against the fourth Defendants at the end of the day, they would be entitled to claim for damages for trespass and conversion. Whilst it is conceded that the damage caused by any logging activities to the environment is virtually irreparable and cannot be quantified in terms of monetary value, damages for trespass and conversion on the other hand are quantifiable. The affordability of the fourth Defendants is a separate matter but having considered submissions of learned Counsel Mr. Nori on this, I am not satisfied it has been established to my satisfaction that the fourth Defendant is insolvent or unable to pay for any damages that may be ordered against it. The same however cannot be said of the first, second and third Defendants as to their affordability to pay for any damages should they lose their case at the end of the day. Balanced with that is of-course the fact that no undertaking for damages had been provided in return by the Plaintiffs, though this was waived in the issue of an interlocutory injunction against further logging on the islands.

Accordingly in my respectful view, the fourth Defendant should be allowed to receive their share under the Agreement but that 10% from that 60% FOB sales value of the proceeds of logs exported should be restrained as the bare minimum for security for any damages which may arise in the event the Plaintiffs should win their case. In the event the fourth Defendant should win its case at the end of the day, it is entitled to claim release of that 10% under the technology agreement.

Where logs are exported, the Government is entitled to claim export duty and other related costs. These charges should be deducted from the other 40% FOB sale proceeds. The remainder is to be subject to restraining orders of this court and to be paid into an interest bearing deposit account in the names of Solicitors for the Plaintiffs, first, second and third Defendants and fourth Defendants.

ORDERS OF THE COURT:

1. Save for the amount of 10%, grant order for the release of 60% of FOB sales value of all log proceeds exported. The 10% is to be paid into the same interest bearing deposit account as the remainder in paragraph 3 of this order.
   
2. Grant order for release of payment of Government export duties and other related charges.
   
3. The remainder to be paid into an interest bearing deposit account in the joint names of Counsels for the Plaintiff, first, second and third Defendants and fourth Defendant.
   
4. Costs in the cause.
   

THE COURT.