Guema v Anthena Investment Ltd [2011] SBHC 137; HCSI-CC 215 of 2011 (15 November 2011)

IN THE HIGH COURT OF SOLOMON ISLANDS.
(Faukona, J).

Civil Case No. 215 of 2011.

BETWEEN:

ANTHONY GUEMA (representing himself and Kusa tribe)
First Claimant

AND:

GABRIEL GASA (representing himself and bahai fabrahu tribe)
Second Claimant

AND:

ANTHENA INVESTMENT Ltd
First Defendant

AND:

EASTERN DEVELOPMENT ENTERPRISES LIMITED
Second Defendant

AND:

ATTORNEY GENERAL (representing Commissioner of Forests).
Third Defendant

Date of Hearing: 25th October 2011.

Date of Ruling: 15th November 2011.

Mr. Togomae for the Claimants.
Mr. Suri for 2nd Defendant.
Ms. Folaumoitua for 3rd Defendant.

RULING ON APPLICATION TO STRIKE OUT.

Faukona, J: There are three applications in this case. By consent Counsels agree to proceed with 2nd Defendant's application to strike out. The other two will follow suit depending on the outcome of strike out application. The strike out application was filed on 30th June 2011.

2. There is no dispute the first claimant is a member of kusa tribe who owns kusa customary land LR 703 situate at Hograno District, Isabel Province. There is no dispute the second Claimant is a member of bahai fabrahu tribe which own fabrahu customary land LR 704, situate at Hograno District, Isabel Province.

3. The first defendant was a registered Company incorporated under the Companies Act, LRO 10, on 11th February, 2010, with speciality listed as being Agriculture. Its registered office being Ranadi, Honiara with postal address of P O Box R68, Honiara. On 17th August 2010, it changed its business name to Mas Solo Investment Limited, re-registered Company number 1000036.

4. The second defendant is a registered company under the Companies Act of Solomon Islands. Its registered office is c/- of CBI Certified Practising Accountants, 1st Floor Komi Fera Building, Point Cruz, Honiara. Its postal address is P O Box 201, Honiara.

5. The claimant's case is that the first and second claimants together with other Trusties grant timber rights to the first defendant on 18th February 2010. On 23rd April 2010, the Commissioner of Forest grants Felling Licence No. A10941 to the first defendant. On 25th August 2010, the first defendant assigned the license to the second defendant. The second defendant then entered into a supplementary agreement with what purported to be the land owners.

6. That paragraph 27 of the Felling Licence A10941 provides that Licences shall not be transfer, assign, or dispose of but may with the Commissioner of Forests approval in writing enter into subcontracting arrangement. Anthena Investment Limited is and no longer in existence, hence, standard logging agreement and grant of timber rights was entered and granted to a new non-existing styled entity.

7. Mr Suri on behalf of the second defendant argues that the original claim contain first defendant as "Anthena Investment Limited". When this application is filed the first defendant is known as "Athena Investment Limited" and not "Anthena Investment Limited". The reason being that the Company called "Anthena Investment Limited" is not the company that executed the "Deed of assignment" to the second defendant". After the search it was found that "Anthena Investment Limited" is a different entity from "Athena Investment Limited" and "Athena Investment Limited" has not filed a notice of change of name. "Anthena Investment Limited" is the Company that change its name to "Mas Solo Investment". Therefore "Athena Investment Limited" is not a party to this case by name but may be by investment activity.

8. However, second defendant carries out logging on LR 703 and LR 704 pursuant to a "Deed of Assignment" it executed with "Athena Investment Limited," but not "Anthena Investment Limited;" the first defendant. The logging activity were carried on those lands pursuant to environment development consent issued on 12th April 2011, a valid licence No. A 10941, and approved harvesting plan.

9. The issue to be considered is which company "Anthea Investment Limited" or "Athena Investment Limited" acquired the timber rights through the normal process under the law, which subsequently was issued with a Felling Licence No. A10941; which later assigned to the second defendant by way of Deed of assignment executed after the approval by the Commissioner of Forest on 29th March 2011 – annexure "RY15".

10. Mrs Folaumoitua for the third defendant outlines the entire process from form 1 application to grant of licence. It appears that all the documents involved in the entire process are in favour of the second defendant's case.

11. It is pertinent to outline certain facts which the parties do not dispute. Parties acknowledge that "Anthena Investment Limited" and "Athena Investment Limited" are two separate incorporated entities under the Companies Act of Solomon Islands. They have separate incorporation numbers, different shareholders, different addresses and different office location in Honiara.

12. Quite differently, this is one of the minds bogging case which require some tedious study of the documents attached as annexures to the sworn statements. To start of with, anyone or company wishing to harvest timbers on customary land for export has to start the process by applying for Form 1. Athena Investment Limited had done that and letter dated 31st August 2009, from Chief Forster (Licensing) Ag. disclosing Form 1 to Provincial Secretary Isabel province (Annexure RL5). There is no document to show Anthena Investment Limited has applied for form 1.

13. When the public notices were issued by the Deputy Secretary of the Province, Mr Lukumana, for timber rights hearing at Kilokaka village, there were two forms issued with two different features. One notice bear the name of Athena Investment Limited and the other Anthena Investment Limited.

14. The minutes of the timber rights on 8th November 2009 featured the application by Athena Investment Limited (Annexure RL7). There was nothing concerning Anthena Investment Limited.

15. Then a state of confusion emerged. Form 2 issued by Provincial Secretary on 1st December 2009 included both Companies as applicants. This is absolutely contrary to the minutes of the timber rights hearing.

16. After the determination and issuant of Form 2, a public notice of such determination was signed by the Provincial Secretary, Mr. Lokumana, on 4th December 2009. The purpose of the notice was to inform public that Provincial Executive has approved and endorsed the granting of timber rights to Athena Investment Limited. At the same time it showed the names of those the Executive identified as having right to negotiate a logging agreement. There was no publication of any determination on behalf of Anthena Investment Limited.

17. On the same date, 4th December 2009, Mr Lokumana wrote a letter to the Commissioner of Forest (page 29 of Mr Gasa's sworn statement) informing the Commissioner that Isabel Provincial executive had on 1st December 2009 approved and endorsed the application from Anthena Investment Limited for re-entry into those respective customary lands.

18. On 15th February 2010 a logging agreement was signed between Athena Investment Limited and the trustees. The first Claimant and other trustees signed in respect of LR703, whilst the second claimant and others signed for LR 704.

19. On 1st April 2010 after publication of determination a letter from the office of the Commissioner of Forest recommended to Isabel Provincial Executive to approve Form III between Athena Investment Limited and the trustees identified on LRs 703, 704, 705 and 706 by endorsing the form III.

20. In reply to that letter, Mr. Lokumana, Deputy Provincial Secretary on behalf of the Provincial Executive wrote a letter dated 6th April, 2010, approved and endorsed the attached form III between Athena Investment Limited and the trustees. Form III is the certificate approving timber rights agreement negotiation.

21. On 23rd April 2010 a Felling Licence No. A10941 was issued to Athena Investment Limited to carry out logging operation a LR 703 to LR 706.

On 29th March 2011 Assistant Chief Forester (operation), approved a Deed of assignment of which Athena Investment Limited to assign its rights, title and interest to the second defendant.

22. On 12th April 2011 the Director of environment and Conservation Division have given approval to Athena Investment Limited to commence its logging operation. By the approved Deed of assignment the second defendant has the right to commence logging activity on the lands it entitles to.

23. On 18th November 2010 the second defendant signed a supplementary agreement with customary land trustees of LR 704 including the second claimant as one of the trustees.

24. What transpires from an earlier event is that Mr. Lokumana in his sworn statement says on paragraph 4 that after the timber rights application by Anthena Investment Limited and the grant, Mr. Quity known as Deke told him that all correspondences of Anthena Investment Limited be now styled as Athena Investment Limited. When Mr. Lokumana speaks of grant, he meant grant of timber rights as in paragraph 3 of his sworn statement. It would appear that it was the first time he had knowledge of Athena Investment Limited. In fact he knows that there was only one form 1 application by Athena Investment Limited. When he issued Public notice for timber rights hearing and the notice of determination he used names of both companies to appear on those documents. He was the main course of confusion and conflict and should account for any inconvenience.

25. In the chronology of events those are the only two documents plus the letter of 4th December 2009 which feature the names of Anthena Investment Limited which run concurrent to Athena Investment Limited. In all aspect of the entire process, under the Forest Resources and Timber Utilisation Act, Athena Investment Limited has fulfilled it all, right down to issuant of Felling licence to it, and subsequent execution of Deed of assignment to second defendant. The effect of the names of two companies featuring in those two documents does not illegitimately disqualify Athena Investment Limited from being a legitimate licence holder after complying with the procedures. In fact the effect is so minimal to do any harm to the entire process.

26. I noted there are a number of correspondences attached to the sworn statement of Gabriel Gasa addressed to the Commissioner of Forest and Athena Investment Limited to withdraw the licence over LR 703 and 704. Those correspondences affirm that it was Athena Investment Limited that operated logging activity on those lands and not Anthena Investment Limited.

27. The crucial point is the misconception by the claimants believing that Anthena Investment Limited first and initially pursue timber rights hearing up to a certain stage before Athena Investment Limited intervened and took over. Having identified the actual defect, it can be cured by filing an application for leave to amend the claim.

28. The first and foremost amendment is to remove Anthena Investment Limited from being the first defendant and substituted it with Athena Investment Limited. Having done that and having shown that Athena was an intruder in the process, the effect would see a further declaration that the grant of timber rights be given to Anthena Investment Limited with a new logging agreement signed with Anthena Investment Limited; consequently Athena Investment Limited will be stripped off its licence. Further amendment will include second defendant supplementary agreement which excluded the claimants therefore void.

29. Mr. Suri argues that Athena Investment Limited is the applicant in this case. Its name appeared from the beginning to the end. There was no form 1 for Anthena Investment Limited. He further argues that the sworn statement of Mr. Gasa show that Anthena Investment Limited has changed its business name to Mas Solo Limited. If Claimants want to replace first defendant to Anthena Investment Limited so that the grant of timber rights be given to Anthena Investment Limited a company no longer existed, is a problem.

30. I have said earlier the defects if one may wish to call it, are minimal. In fact they are not defects to cause severity to the timber rights processes. They were caused by the Deputy Provincial Secretary perhaps; because of similarity in business name of the two companies. And they appear only on notice of hearing and on form 2, which bear the names of both companies.

31. However, it stands out clear that Athena Investment Limited, the applicant, whose name appear on all documents, correspondences and the entire timber rights process from the beginning to the end. It would be difficult to give a grant of timber rights to a company which did not involve in the whole entire process.

32. The Deed of assignment executed with the second defendant was a process approved and endorsed by the Commissioner of Forest. Paragraph 27 of the Felling Licence No. A10941 clearly stated that a licence shall not be transferred, assigned or dispose of but may, with the commissioner of Forest's approval in writing. The Commissioner had approved the Deed of assignment by written letter dated 29th March 2011 signed by Kevin Alu, Assistant Chief Forester (operation).

33. In considering this application I have taken note of the guidelines outline in the case of Tikani v Motui and others[1]. I decided it is appropriate as it is clear that the statement of claim as it stands is insufficient to entitle the claimants to what they ask for. It is a plain case where no reasonable amendment would cure the defect. I am sure that the cause of action will certainly fall. I therefore grant the application, the statement of claim should be struck out.

Orders.

1. That the first Defendant is a different entity from the company which holds Felling Licence No. A10941, namely, Athena Investment Limited (20111472).

2. The Claimants' claim is strike out as being frivolous, vexatious and disclosing no reasonable cause of action.

3. The Claimants are ordered to pay the second defendant's cost on standard basis.

4. The Claimants to pay the third defendants cost on standard basis.

The Court

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^[1] HCC 29 of 2001.