Glengrow (SI) Company Ltd v Mega Enterprises Ltd [2010] SBHC 66; HCSI-CC 89 of 2008 (14 October 2010)

IN THE HIGH COURT OF SOLOMON ISLANDS
(GOLDSBROUGH J)

Civil case No: 89 of 2008

BETWEEN:

GLENGROW (SI) COMPANY LIMITED
First Claimant

AND:

PREMIER OF ISABEL PROVINCE
Second Claimant

AND:

MEGA ENTERPRISES LIMITED
First Defendant

AND:

RURUMA DEVELOPMENT COMPANY
Second Defendant

Date of Hearing: 29 September 2010
Date of Judgment: 14 October 2010

Tongarutu N for the First Claimant
Rano W for the Second Claimant
Kingmele R for the First Defendant
Apaniai J for the Second Defendant

JUDGMENT

GOLDSBROUGH J:

1. By claim filed 8 April 2008 the claimant seeks damages for trespass and timber extracted from Lot 17 within Parcel Number 071-001-17 which is held by the Second Claimant. The basis for the claim of trespass is a Grant of Profit.
   
2. By consent and through application filed 7 May 2010 the Court is asked to consider a preliminary point of law under Rule 12.11 Solomon Islands Courts (Civil Procedure) Rules 2007. Whilst two questions were raised in that application, and again by consent, the court heard submissions on only the first question raised which is whether the First Claimant's Grant of Profit registered 15 August 2009 against the Second Claimant's Perpetual Estate in Parcel Number 071-001-17 ('the land') creates any exclusive interest in favour of the First Claimant in logs, if any, felled by the First Defendant for the Second Defendant in the land.
   
3. Submissions on the question were made on behalf of all parties to the case, including submissions from the Second Claimant supporting the position of the First and Second Defendant. The registered Grant of Profit is in evidence before the court.
   
4. It is clear from the Grant of Profit that it is not and was never expressed to be an exclusive grant. This is not the submission of the First Claimant. Counsel for the First Claimant in submissions concedes that the Grant of Profit does not expressly provide an exclusive grant. In her submissions counsel for the First Claimant maintains that it is the circumstances in which the Grant of Profit exists that require a construction of the Grant as being exclusive.
   
5. On behalf of the First and Second Defendants it is submitted that unless the registered Grant of Profit is expressed to be exclusive it must be interpreted as having been granted in common with the rights of the Perpetual Estate Holder. Authority for that proposition was provided as Duke of Sutherland v Heathcote[1].
   
6. The rationale behind such a construction comes from a consideration of section 112, section 117 (2) and section 181 of the Land and Titles Act [Cap 133]. Section 112 provides for the perpetual estate and sets out the benefits that accrue to an owner, and makes provision for the owner to dispose of either in whole or in part. Section 117 sets out that which is necessary as regards registration of dispositions and the effect of non-registration and section 181 provides as follows:-
   

181.—(1) The owner of an estate or a registered lease may, by an instrument in the prescribed form, grant a profit.

(2) The instrument shall indicate clearly the nature of the profit, the period for which it is to be enjoyed, and whether it is to be enjoyed—

(a) in gross, or as appurtenant to other land; and

(b) by the grantee exclusively, or by him in common with the grantor.

(3) The grant of a profit shall be completed—

(a) by its registration as an encumbrance in the register of the interest which it burdens;

(b) where it is appurtenant to land comprised in an estate or registered lease, by its registration in the property section of the register in respect of that estate or lease; and

(b) by filing the instrument.

7. It is clear from submissions for the First and Second Defendant that the Grant of Profit is not itself attacked. It is conceded that the Grant of Profit is and remains valid until its expiration on 31 August 2012. What is in issue is whether the rights in the Grant are to be exercised exclusively or in common with the grantor.
   
8. No assistance can be found in the grant itself where there is space to set out the details of these rights. Nothing has been inserted in the First Schedule to the Grant where one might expect to find the details. Indeed there are side notes to the First Schedule which quite clearly explain what details are required. The side note does not further explain the effect of not providing the necessary details and it is in this area where the court is obliged to apply rules of construction external to the document itself.
   
9. Turning to the First Schedule of the registered document there is reference to a memorandum of understanding dated 9 August 2007 and a logging agreement of the same date, which are said to be in respect of the same area of land and concern the harvesting and development of commercial trees on Allardyce Provincial Government Land and which should be attached. They are not attached to the instrument in evidence before the Court and it is conceded by counsel for the First Claimant that they do not contain anything which might be construed in the Claimant's favour as making the Grant of Profit exclusive.
   
10. Submissions for the First Claimant are based not on the grant itself, which it is conceded does not provide expressly for an exclusive grant of profit, but on circumstances extraneous to the grant. It is said in submissions, and this is not in issue, that no other party or person has a concurrent grant given by the same grantor. The First Claimant maintains that they have a Grant of Profit within which the rights are to be exercised exclusively simply because no other grant of profit has been entered into or registered.
    
11. There is indeed no other registered grant of profit, but this interpretation of exclusivity seems at best to be misguided. The rights under a grant of profit may be expressed to be exercised exclusively by the grantee or in common with the grantor. Absent express provision of exclusivity, the grant should be constructed as being in common. This is the dicta found in the Duke of Sutherland (supra). It is a construction that follows logically from the various provisions earlier cited of Cap 133.
    
12. It is therefore immaterial to the construction of the Grant of Profit that another or a further grant has not been made, for the provision is either exclusive to the grantee or in common with the grantor. That the right is in common with the grantor requires no further grant, which could only be a grant to himself as the landowner. That result is nonsense.
    
13. In those circumstances this Grant of Profit does not confer any exclusive right or interest in favour of the First Claimant. It provides no more than an interest which is to be exercised in common with the grantor, that is to say the Second Claimant.
    
14. I will hear from counsel on what, if any, consequential orders are now necessary.
    

Dated this 14th day of October 2010.

GOLDSBROUGH J

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^[1] [1892] 1Ch 475.