Da Printers Ltd v Court Appointed Manager of Development Bank of Solomon Islands [2012] SBHC 12; HCSI-CC 347 of 2009 (27 January 2012)

HIGH COURT OF SOLOMON ISLANDS
(Mwanesalua J)

Civil Case No. 347 of 2009

BETWEEN:

DA PRINTERS LTD
Claimant

AND:

COURT APPOINTED MANAGER OF DEVELOPMENT BANK OF SOLOMON ISLANDS
Defendant

Date of Hearing: 18 November 2011
Date of Judgment: 27 January 2012

C. Fakarii for Claimant
J.A. Keniapisia for Defendant

JUDGMENT

Mwanesalua J:

1. This is a claim by the Claimant for alleged breach of contract. The Claimant is a private company duly registered under relevant laws of Solomon Islands and carrying out business in printing and stamp manufacturing.
   
2. The Claimant seeks:
   
   1. A declaration that there has been a contract;
      
   2. An order for specific performance on the part of the Defendant, that the tender bid originally offered by the Claimant on 9 November 2006, and accepted by the Defendant on 14 November 2006 be endorsed and approved by the honourable court;
      

3. An order restraining the Defendant from interfering with the following estates pending the approval of the tender bid by this honourable court;

(a) PN: 171-001-312

(b) PN: 171-001-313

(c) PN: 171-001-316 and;

(d) PN: 171-001-317

4. In the alternative, an order against the Defendant for recession of contract and damages to be assessed incurred by the Claimant due to negligent misrepresentation;

5. Any orders that court deems fit;

6. Costs.

7. The Claimant's case is that (i) the correspondence between the Claimant and the Defendant from 9 November 2008 to 12 November 2008 constitutes a legally binding agreement between the parties to sell PN 191- 001-312, PN 191-001-313, PN 191-001-136 and PN 191- 001- 317 ("properties") and (ii) the Defendant breached this agreement by seeking the High Court's approval of Malaita Province loosing tender bid instead of the Claimant's winning tender bid. And (iii) the Claimant is entitled to damages to be assessed.

8. The Defendant is the Central Bank of Solomon Islands ("CBSI") the court appointed Manager for the former Development Bank of Solomon Islands ("DBSI"). The High Court sanctioned this appointment/scheme on 10 June 2004, which saw the Defendant (CBSI) took control of the banking business of DBSI.

9. Pursuant to the said High Court appointment/scheme, the Defendant was given board, management powers and functions of DBSI, in CBSI –v- DBSI [1]. Orders 3 and 4 of the sanctioned appointment are relevant to the issues in this case. They are as follows:

Order 3: "that with effect from the date hereof, leave of the court shall be required to commence any action against the Defendant or to enforce any existing judgments or orders against the defendant and notice of any application for leave, shall be served upon the court appointed manager".

Order 4: "that the defendant, its directors, servants or agents are prohibited from damaging, removing or selling or otherwise disposing of any of the defendant's property or asserts, except with the consent of the appointed manager".

10. There are agreed facts before the court. They are out in the trial book.[2] They are the following in brief:

(i) PN: 171-001-312 was registered under Molaisufa Sawane's name and that PN: 171-001-313, PN: 171-001-316 and PN: 171-001-317 registered under Francis Sawane. High Court Civil Case No. 69 of 2003 related to Francis Sawane under which he lost his Fixed-Term Estates to DBSI to non-payment of his loan from DBSI. On the other hand High Court Civil Case No. 95 of 2006 relate to Molaisufa Sawane under which he lost Fix Term Estate for non-payment of his loan with DBSI.

(ii) On 2 November 2006, the Defendant advertised the estates for sale. On 9 November 2006, the Claimant among other bidders submitted its bid of $980,400.00 for the Estates and accepted by the Defendant on 14 November 2006 subject to the endorsement of the High Court. The Defendant requested the Claimant to confirm its acceptance. On 21 November 2006, the Claimant confirmed it acceptance to the Defendant. On 15 October 2008, the Defendant informed the Claimant that the properties were to be placed up for retender and advised the Claimant to re-apply. The Defendant re-tendered the properties on 20 October 2008, the Claimant among other bids submitted its bid for the properties for $980,000.00. ON 12 November 2008, the Claimant accepted the Defendant's offer and requested a speed up of the process with the High Court. On 2 February 2009, the Solicitor for Francis Sawane and Molaisafu informed the Defendant's solicitor that Malaita Province has decided to purchase the properties for the sum of $3,400,000.00. On 5 February 2009, the High Court accepted the bid by the Malaia Province instead of the Claimant. An order was then made by the High Court approving Malaita Province's bid. A sum of $1,946,000.00 was paid to DBSI by the Solomon Islands Government on behalf of Malaita Province.

11. The case for the Defendant is that, the correspondences relating to tenders and sale for the properties did not constitute a valid agreement, because on the part of the Defendant the Defendant they were mere offers being made subject to a condition precedent, that is to say, that the sale of the properties, must be sanction by the High Court, according to High Court orders in DBSI –v- Sawane Civil Case No. 69 of 2003 delivered 15 October 2008. Those High Court orders state:

"1. That Civil Case No. 95 of 2006 be consolidated with this action.

2. That Parcel No. 171-001-312, Parcel No. 171-001-313, 177-001-316 and Parcel No. 171-001-137 ("property") be retendered for sale until 31st October 2008 and that the winning bidders be submitted for court approval".

11.1 It is also the Defendant's case that this claim is null and void because it was commenced without leave of the court contrary to order 3 in Civil Case No. 95 of 2004 as referred at page.......above.

12. In support of its case to on conclusion precedent, the Defendant what Graw[3] said:

"It is quite clear that offers can be made subject to stipulated conditions. Common examples include "subject to finance", subject to zoning approval etc. If not fulfilled, the offer lapses (unless the offered agrees to waive it)......

5.2.4. Graw further said:

"A contact is said to be subject to a condition precedent if the contract is not to be binding in the stance that complete performance cannot be demanded, unless or until a specified event occurs....."[4]

13. On 14 November 2006, the Defendant wrote to the Claimant, advising the Manager, that the DBSI under the court appointed Manager has accepted the Claimant's bid of $980,000.00, but subjected to the High Court endorsement thereafter.

14. In relation to the issue of condition precedent, the Claimant seems to submit that the consent of the court is not a condition precedent but an essential term of the contract itself.

15. There issues for determination by the court in this case. They are set out in the trial book. After hearing the arguments of consents. The courts view on them are that the breach of the court orders of 10 June 2004 on Civil Case No. 95 of 2004 is that now compliance with court to order may amount to contempt but did not make this clan will and void see present court rules.

16. The court determining that the correspondence did create a valid contract.

17. That the endorse of the court is an condition precedent to the formula of any contract but the Claimant and Defendant.

This action is dismissed and cost.

THE COURT

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^[1] Civil Case No. 095 of 2004
^[2] Tribal book page 87
^[3] Graw “An Introduction to law of contract, 2^nd edition (1993) at p. 30
^[4] Bid, at p.160-161.