Linear Perspective Ltd v Attorney General [2009] SBHC 39; HCSI-CC 157 of 2009 (19 August 2009)

HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction

Civil Case No. 157 of 2009

BETWEEN:

LINEAR PERSPECTIVE LIMITED
Claimant

AND:

ATTORNEY-GENERAL Representing the Commissioner of Forests)
1st Defendant

AND:

MARTIN PIRIVOLOMO AND COLLIN RUQEBATU
(Trading as Patudoka Association)
2nd Defendant

AND:

PACIFIC METRO LIMITED
3rd Defendant

Mwanesalua J

Date of Hearing: 7 August 2009
Date of Ruling: 19 August 2009

A Nori for the Claimant
Mr J Muria for the First Defendant
Mr J Katahanas for the Third Defendant

RULING

Mwanesalua J:

1 The Claimant, Linear Perspective Limited (Linear) is a private company incorporated on 24 September 2003. On 12 May 2003 it signed a Timber Rights Agreement with members of the Patulavata Tribe. On 1 December 2003 it was issued with Felling Licence No. A10139 to cut, fell and take away timber from Patulavata Customary Land on Choiseul. It was not renewed when Linear sought renewal when it expired on 1 December 2008. On 24 March 2004, Orion Limited and Patulavata Landowners Association executed an Agreement for the purchase and sale of 100% of the shares in Linear for $40,000.00 subject to an approval by the Foreign Investment Board. This Agreement was signed on behalf of Patulavata Landowners Association by, amongst others, Martin Pirivolomo and Collin Ruqebatu. The First Defendant, is the Attorney-General, representing the Commissioner of Forests (Commissioner). He issued the Felling Licence to Linear but declined its renewal when it expired. The second Defendant, is Patudoka Association (Patudoka Association) under which Martin Pirivolomo and Collin Ruqebatu are trading. It was registered on 12 January 2009 and was issued Felling Licence No. A10913 by the Commissioner on 17 March 2009. The Third Defendant, is Pacific Metro Limited (Pacific Metro). On 7 March 2007, Linear and Pacific Metro signed a Joint-Venture Agreement under which Pacific Venture was engaged as Linear’s Logging Contractor on Patulavata Customary Land. On 12 January 2009, Patudoka Association signed a Timber Rights Agreement with Patulavata Tribe Landowners and on the same day, it signed a Technology Agreement with Pacific Metro to, amongst other things, cut, fell and extract logs for export from Patulavata Customary Land.

2 On 11 Mary 2009, Linear filed its Claim against the Commissioner, Patudoka Association and Pacific Metro under rule 15.3.4 of the Solomon Islands Courts (Civil Procedure) Rules 2007. The Claim seeks: "(1) a Quashing Order to bring up and quash the Felling Licence purportedly issued by the Commissioner of Forests to Patudoka Landowners Association; (2) a Mandatory Order to compel the Commissioner of Forests to renew Felling Licence No. A10139 to the Claimants under Part III of the Forestry Resources and Timber Utilisation Act in respect of Patulavata Land on Choiseul Province; (3) a injunction to restrain Patudoka Landowners Association and its contract, employees and agents from carrying out any logging operation in the land area subject to this action, namely Patulavata concession in Choiseul Province; and (4) Damages against the Second and Third Defendants; (5) Costs; and (6) Such further orders as this Honourable Court deems fit to make".

3 The Claimant made an application to join Orion Limited and the Patulavata Land Trustees to become parties to this Claim. This application was made under rule 3.5 of the Solomon Islands Courts (Civil Procedure) Rules 2007, which is in these terms "3.5...The Court may order that a person becomes a party to a proceeding if the person’s presence as a party is necessary to enable the Court to make a decision fairly and effectively in the proceeding. A person who does not consent to be added as a Claimant shall be added as a Defendant". The Second and the Third Defendants opposed this application.

4 Counsel for the Claimant submits that the presence of Orion Limited and the Trustees of Patulavata Customary Land would be necessary in allowing the Court to come to a fair and effective decision. The issues which will require them as party are:-

"(a) Whether the Second Defendant had ever applied for a timber rights over Patulavata land; (b) Whether the Second Defendant had negotiated any terms with the Landowners in relation to the grant of timber rights as required by Section 8(3) of the Act; (c) Whether signing of a timber rights agreement with the Second Defendant, instead of cooperating with and assisting the Claimant to have its Licence renewed, amounted to a breach of the earlier timber rights agreement executed with the Claimant; and, (d) Whether the execution of a new timber rights agreement with the Second Defendant amounted to be a breach of the Share/Sale and purchase agreement signed with Orion Limited, when they knew very well that the only value attached to their shares in the Claimant at the time was the Felling Licence issued following their signing of the timber rights agreement with the Claimant."

5 It is submitted on behalf of the Second and Third Defendants that the Claimants’ claim is virtually "on all fours" with the facts in Delta Timber Company Limited –v- Hong [2007]/SBHC 135. In that case, Delta was engaged to carry out logging operations on customary land by Bolopoe Corporation on Agreements. These agreements include a financial agreement; a management agreement; a log pond agreement and an access agreement. Bolopoe Corporation resiled from these agreements and subsequently entered into agreements with a competing logger, Omex Limited. Delta sought to injunct the proceeds of the Omex Logging operation on the basis that Delta feared that if it won the case at the end of the day, it may get nothing from the Defendant.

6 This Court rejects the Second and the Third Defendants’ submission that the Claimant’s claim is virtually "on all fours", with the facts in Delta –v- Hong cited above, because that case does not concern a change of a licencee to a concession; a change of a timber rights agreement; a sale of shares in the licencee; a change of Felling Licence over a concession; the grant of a Felling Licence to a Licencee without going through a time process; a quashing of a Felling Licence; and a joinder of parties to a proceeding as in this claim. The Claimant’s claim here goes beyond the mere breach of contracts considered in Delta –v- Hong.

7 The timber rights agreements over Patulavata Customary Land were granted to Linear and Patudoka Association by the same landowners on different occasions. The agreements provide different percentages of royalty to be paid to the landowners who may wish to have a say on the contracts. They may therefore wish to be present as the decision of the Court in this Claim may affect their interests in royalties and their respective agreements. On the other hand, there is a share sale and purchase agreement between Linear and Orion Limited. A "Share" in a company does not donate rights only, it also donates obligations also[1]. Orion Limited may wish to be present in this claim as well.

8 The Courts task in determining the issues in the claim before it would be enhanced if all parties who feature in this claim are heard. This Court therefore decides that Orion Limited and the Patulavata Customary Land Trustees be added as parties to this Claim as co-claimant and co-defendant respectively.

Orders of the Court:

1 Orion Limited and Patulavata Land Trustees be added to this Claim.

2 Orion is to be added as Second Claimant.

3 The Patulavata Customary Land Trustees be added as the Fourth Defendant.

4 Costs to be costs in the cause.

F Mwanesalua J
THE COURT

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^[1] Re National Bank of Wales 66L.J. Ch. 225, 226