Solomon Telekom Company Ltd v Levers Solomons Ltd [2009] SBHC 62; HCSI-CC 371 of 2006 (25 November 2009)

IN THE HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction

BETWEEN:

SOLOMON TELEKOM COMPANY LIMITED
Claimant

AND:

LEVERS SOLOMONS LIMITED
Defendant

Date of Hearing: 17 November 2009
Date of Decision: 25 November 2009

Mr. Puhimana for Claimant
Mr. Radclyffe for Defendant

DECISION AFTER TRIAL

Cameron PJ:

1. The claimant Solomon Telekom seeks to recover $40,000 it paid to the defendant in March 1997. The defendant Levers Solomons owned land that it intended to subdivide, and Solomon Telekom was interested in acquiring a portion of that land once subdivided. The invoice from the defendant characterised the payment as a "deposit required to secure approx 10 hectares of land". In the event the subdivision did not occur for a number of years and no purchase took place. The issue is whether Solomon Telekom can legally recover the payment. The defendant argues that more than 6 years has elapsed since the claimant was first in a position to recover the money, and that the claim is therefore statute-barred.

2. The nature of the original arrangement is relevant. It is clear that the parties anticipated that a written contract for the sale and purchase of the land would be entered into at a later point in time, the invoice for the deposit stating "Balance of monies due on signing of the contract and transfer documentation". It is also clear that when the deposit was paid, the boundaries of the 10 hectares of land to be the subject of the purchase had not been identified and the actual price not determined. This is clear from the same invoice, which as to location merely describes the land as "near to the existing Telekom towers and power lines on the south side of the Airport", and states "Survey of area is almost complete". As to price, the invoice states "The land in this area is expected to be valued and sold at around $10,000 per hectare".

3. I find that there was no agreement for sale and purchase between the parties. As to the nature of their relationship at the time the money was paid, I consider that there was an intention between them to create legal relations as to the payment. The money paid was described in the invoice as a "deposit", and the stated purpose of the payment was "to secure approx 10 hectares of land" intended to be subdivided from a larger block. Also, there was an estimate of price and something of a time line provided by the statement "Survey of area is almost complete". At the very least it is apparent that these commercial parties intended that if the land did not become available for sale within a reasonable time and at a figure approximating the anticipated price then Solomon Telekom would be entitled to a refund of its deposit. Otherwise, the payment of the money would impose no obligation at all on Levers, a result not contemplated by the parties.

4. Following the payment of the money, there was correspondence between the parties in 1997 and 1978, and then there was no evidence as to any communications from 1999 to 2004 (this largely coinciding with the period of the ethnic tensions). It would seem that no subdivision of the land occurred up to 2004. In 2005 there were emails and letters between the parties, in which it became apparent that Levers was seeking the then market price for the land of around $150,000 per hectare (as contrasted with the original $10,000 per hectare anticipated price in 1997). This was unacceptable to Solomon Telekom, which by letter dated 2 June 2005 demanded the return of its money.

5. I find that Solomon Telekom’s right to recover its money arose once it became apparent that Levers was not prepared to sell the land for "around $10,000 per hectare" and Solomon Telekom in turn made it clear that it was not prepared to pay the then current market prices. From the correspondence this situation became apparent in May 2005. I find that the limitation period of 6 years for commencing an action began to run at that point. Proceedings to recover the funds were in fact issued in September 2006, well within that period. I mention that had in fact Solomon Telekom requested a refund of the deposit many years earlier on the legitimate grounds that the subdivision had not been completed within a reasonable time, then a refusal by Levers to return it at that point would have created a ‘right to relief within the meaning of section 17 of the Limitation Act and thus set the 6 year time limit running. However, this did not occur.

6. For these reasons I enter judgment for the claimant against the defendant in the sum of $40,000. Interest at 5 per cent per annum is payable on the amount of the judgement debt unpaid on and after the day judgment is entered. I also order that the defendant pay the claimant’s filing fees of $600, together with costs on the standard basis as agreed or failing agreement as taxed.

BY THE COURT

Justice IDR Cameron
Puisne Judge