Solgreen Enterprises Ltd v Attorney General [2013] SBHC 223; HCSI-CC 245 of 2006 (16 July 2013)

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Jurisdiction

BETWEEN:
SOLGREEN ENTERPRISES LTD
Claimant
AND:

ATTORNEY-GENERAL
Defendant
(Representing the Fisheries Department)

Mrs M. Bird for the Claimants
Mr. S. Banuve Solicitor General with Mr. S. Woods for the Attorney General

Hearing: 16 July 2013
Judgment: [Extempore] 16 July 2013

Mwanesalua, DCJ

Claim for damages for tortious acts of the Fisheries Department

Judgment

These proceedings were instituted by way of Statement of Claim and pleaded the defendant was negligent in its duty to the plaintiff in various ways by failing to issue fishing licences. As a consequence of the plaintiff’s wish to reduce the level of licence fees payable per fishing vessel and to pay by instalments for the fee in 2004, a document called a Development Agreement dated 26 May 2004 was executed by the Permanent Secretary, Department of Fisheries & Marine Resources on behalf of the Government of Solomon Islands and by Mr. Kazuo Nagasawa General Manager, on behalf of Solgreen Enterprises Ltd (“Sel”) (a company registered no 82 of 1994 incorporated under the Companies Ordinance Cap 66). The Development Agreement with its fee schedule was executed to come into immediate effect.

The licence reduced fees apparently were paid and the ten fishing boats of Sel commenced fishing. Despite various attempts by the company to have the licenses delivered they did not eventuate, rather on the 15 November 2004, MV Yung Yu 203 was arrested by the RSI Police patrol boat for fishing without a licence.

Mr. Nagasawa says the company paid additional licence fees of US$ 25K for 5 fishing vessels in accordance with a letter from the Minister of Fisheries and a further sum of SI$615K for the release of MV Yung Yu 203. As well, Sel suffered further losses arising from an aborted charter flight and it also claims loss of export value of fish.

No licences to fish have been issued and the company has effectively lost its business.

That letter from the Minister of Fisheries upon which the company relies as entitling it to its fishing licences was given on the 15 November 2004 and headed “Revocation of Previous Licence fee Agreement with Solgreen” for the company, it says, paid moneys asked of it. I reproduce that letter, omitting formal parts:-

The Managing Director
Solgreen Enterprises Limited
PO Box 1703
Honiara

Dear Sir,

REVOCATION OF PREVIOUS LICENCE FEE AGREEMENT WITH SOLGREEN

Based on our records, it is realised that the former Permanent Secretary on the advice of the former Deputy Director Licensing, granted approval for a reduction of licence fees in respect of Solgreen vessels from $10,000 to $5000 per vessel per annum and to be paid in instalments.

I wish to advise that this agreement is hereby revoked, on the grounds that as provided under Section 25 [1] [a] and [b] of the Fisheries Act 1998, only the Minister can prescribe such fees including the reduction or increase as otherwise determined. The instruction therefore previously issued is deemed null and void. With all due respect to the status of your company, the arrangement of payments in instalments effectively means you cannot be issued with a licence until fees have been paid in full. Thus the vessels would have been operating without a licence, rendering it illegal.

The actual fees which are prescribed under the legal fee schedule of 1997 indicates that a fee of $30,000 should be payable per vessel per annum and not $10,000. As the Minister responsible for Fisheries, I hereby advise that until all arrears due, as determined by the departments licencing section are paid up, No licence shall be further issued in respect of Solgreen and all vessels affected will be called into port.

My position on behalf of the Department is made clear and I hope this can be resolved procedurally.

Thank you for your understanding and cooperation.

Yours faithfully,
[signed]

Hon. Paul Maenu’u MP
Minister for Fisheries and Marine Resources

As a consequence of the failure of this enterprise Sel instituted these proceedings (commenced in accordance with previous rules of court) claimed loss and damages from the Fisheries Department for negligent acts.

The basis of the plaintiff’s claim

The loss and damages claimed totalled SI$3,402,218.26. The acts of negligence particularised were;-

[a] a failure to properly advise the plaintiff on the applicable licence fees;

[b] a failure to render proper advise in relation to the legality of the Development Agreement;

[c] a failure to issue fishing licences to the plaintiff even though US$5,000 was paid per vessel in accordance with the Development Agreement;

[d] authorising the plaintiff to carry out fishing when it knew or ought to have known that it was illegal in the absence of licences on board the vessels;

[e] a failure to issue fishing licences to 5 boats after US$125,000 was duly paid the defendant.

These proceedings were commenced on 22 January 2006. The Fisheries defence put the plaintiff to strict proof in relation to the acts of negligence detailed in Sel’s Claim, and denied the loss and damage.

I should also say that the defence put the claimant to strict proof of the allegation by the plaintiff that Fisheries acted unlawfully, by authorising and advising the company that it could start fishing; and the licence for each respective fishing boat would be delivered on board each vessel. The evidence to this effect was that of Mr. Nagasawa and was hearsay, evidence of no value. Especially when I have regard to his other evidence which makes plain he was aware of the risks he was taking, fishing without licences.

By amended defence filed on the 7 November 2007 the Fisheries put the plaintiff further to strict proof of the payment of the additional claimed fishing fees and release fees for MV Young Yu 203 and importantly denied any negligence in its duty to the plaintiff as alleged in the claim. For these moneys formed part of a Settlement Agreement where the company compounded its obligations under the Act by such payment and payment cannot be seen as solely licence fees, for instance.

Then there came confusion in the procedures by which this case was to proceed, until on the 28^th April 2010, a further amended defence was filed which goes much further than those previously filed and for the first time raises the issue of the proper alternate course available to the claimant but not followed, judicial review, since the proceedings are all about the powers of particular persons acting under the provisions of the Fisheries Act.

The Further Amended Defence of the Defendant
The further amended defence pleaded that, in accordance with Section 49 of the Fisheries Act, the plaintiff expressed its willingness that the offence under Section 16 (1) of the Act be dealt with by way of compounding. I set out paras 17, 18, 19, 20 & 21 of the amended defence.

17. The defendant states that, in accordance with section 49 of the Fisheries Act, the Claimant expressed its willingness that the offence under section 16 [1] [a] of the Fisheries Act by the Claimant be dealt with by way of compounding.

18. The defendant denies that it was negligent as alleged in paragraph 19 of the Statement of Claim or at all. The Minister of Fisheries, being satisfied that an offence had been committed and that the Claimant had expressed willingness for the offence to be dealt with by compounding, entered into negotiations with the Claimant to compound the offence. As a consequence of those negotiations a sum of money was agreed upon and the Minister did compound the offence by accepting on behalf of the Government, the said monetary sum. The terms of the agreement were reduced to writing in a document dated 18 November 2004 headed “Agreement to settle”. The defendant repeats and relies upon that document as if it were set out in full herein. The defendant denies the balance of paragraph 17 of the Statement of Claim.

19. The defendant admits it did not issue licences but denies any obligation at law to do so and denies the balance of paragraph 18 of the Statement of Claim.

20. The defendant denies that it has been negligent as alleged in paragraph 19 of the Statement of Claim or at all.

21. In answer to paragraph 20 of the Statement of Claim, the defendant denies that the claimant has suffered or is entitled to the losses, damages and costs pleaded therein, further states that in relation to the losses, damages and costs pleaded therein the losses damages and costs were not caused by or connected with any relevant act or omission of the defendant; are too remote in law from any relevant act or omission of the defendant to be recoverable at law, are not the losses of the claimant; and further states that the losses do not relate to any cause of action known to law.

The documents entitled “Agreements to settle” are in evidence; the material import of the agreements are as set out in the further amended defence. I accept the evidence shows the admission by the plaintiff of the facts alleged about fishing without a licence and the acceptance by the plaintiff company of the compounding of the matters touched on in the agreements instead of the alternative, facing fines or court proceedings.

It would seem the defendant then made separate application to strike the proceedings, which was later withdrawn but remained part of its defence going to trial.

The matter proceeded to trial as a defended case on the pleadings referred to above and on the affidavit Mr. Kaguo Nagasawa for the plaintiff and that of Mr. Robert Firigeni for the defendant, [Mr. Firigeni then being a Principal Crown Counsel with the Attorney General]. Mr. Firigeni’s affidavit annexed various documents supporting the Attorney’s further Amended Defence. Both were cross examined but I rely on the documents touched on and to be referred to since the proceedings are concerned with those documents and the law as it affects them.

For the facts about the relationship between the parties are plain from the documents in evidence, documents forming part of the sworn statements and admitted by the parties. The relationship, whilst the plaintiff implied seeks to plead it as one of mendicancy and hence perhaps giving rise to a duty of care on the part of the Fisheries Department, was that of a prospective fisher required to comply with the appropriate law regulating the industry, a law made statutory by the Fisheries Act 1998. By dealing with personnel in the Department and recounting conversations and purported allowances to breach licence obligations, the plaintiff has sought to show a duty of care due him, a duty expressly denied in the further amended defence.

Neither in the pleadings nor in the statement of case are there facts which I might find, giving rise to a duty of care owed by the defendant to the claimant. The most obvious refutation of any suggestion of a duty of care owed are the two Agreements to Settle executed by the claimants in relation to breaches of the Fisheries Act arising out of the absence of licences to fish. Nowhere does the claimant suggest these Agreements whilst executed were executed by mistake or were to be seen as non est factum. They, by implication, accept the rescission of any supposed right in the Secretary of the Department was executed by the Secretary of the Department of Fisheries behalf, neither by the Director who has power under Section 16, for instance, to issue a licence nor by the Minister who is the responsible person able to prescribe [and presumably vary] fees.

For those later Agreements acknowledged the breaches compounded and settled by the terms of the documents. Hence no-where are there pleaded facts constituting a breach of any duty of care to be afforded the claimant after the companies acceptance and acknowledgement of the commission of offences under the Act. For facts giving rise to the duty must be pleaded in the case, not the duty itself as has happened here, yet [the duty and] the negligence pleaded predates the acts by the claimant by which it accepted the compounding by the Minister in an endeavour to settle the differences afforded by the claimant’s earlier actions found in to be in breach of the fishing regulations.

Nowhere do the facts raise a duty in the Minister to afford this claimant particular dispensation from the terms of the Act, nor is there evidence to show any approach to the Minister named for positions and responsibilities under the terms of the Act. In any event the causal connection between the loss suffered by the Claimant and the defendant is absent, for the loss on the evidence of the claimant was attributable to factors going to the claimant’s inability to finance the continued fishing without in effect, finance from the Government through reduction and deferment of fishing licence fees. Again there is no evidence to show the Government was obligated to finance the defendant in these circumstances. In fact, the evidence is, the Minister implied by denied any such recourse by his letter of the 15 November 2004.

I gave an oral finding earlier in favour of the defendant, and struck out the claim on the 16 July 2013. Whilst the plaintiff may have pursued his right of appeal on the basis of my finding then, any appeal is long out of time. Because of the publicity, which this aggrieved person has been able to engender, I now publish my reasons.

By paragraph 19 of the claim, the plaintiff states the acts giving rise to its plea of negligence by the defendant. It firstly pleads the Fisheries failed to properly advise the company, Sel, on the applicable licence fees.

On the evidence this has not been made out. What clearly transpired from a reading of the company Managing Directors’ own statement and from the terms of the Development Agreement is the Sel sought and was granted from time to time, relief from strict compliance with payment requirements of licence fees. I am satisfied the company was well aware of the licence fees applicable otherwise there was no need to seek a reduction from the established fees.

The company secondly pleads that Fisheries failed to render proper advice to the company on the legality of the Development Agreement. The Fisheries Department has no obligation to proffer legal advice and whilst the issue relates to the legality of the document executed by the Secretary of the Department and whilst the plaintiff may rely on the presumption of regularity (in that the Permanent Secretary had authority to bind the Minister with power to act pursuant to S25 of the Fisheries Act 1993 and fix fees) once it was resolved by the Minister on the 15 November 2004, and the Development Agreement was declared null and void, the fact remained that fishing was taking place without proper licence for the presumption of regularity was refuted, as a matter of law.

By his own statement the Director of the company was aware that was contrary to law for the Director was often seeking the licences and aware of the consequences if fishing without licence.

On the 18 November 2004 the company purported to execute an agreement to settle and paid an amount in settlement of the breach of section 16 (i) (a) of the Fisheries Act 1998 by the companies vessel MV Young Yu 203. The Development Agreement was revoked as it breached S.25 (1) (a) & (b) of the Act for the Agreement purported to prescribe fees in contravention of the Act. It matters not whether there has been ignorance of the law on the plaintiff’s part, the fact of purported reliance on the Fisheries officers’ part in having been a party to the drawing up of the Agreement cannot obviate the effect of S.25 of the Act allowing the plaintiff to go behind the statutory requirements.

Section 25. [1] Subject to subsections [2] and [3] there shall be payable-

[a] in respect of every fishing licence, every endorsement of a fishing licence under section 16 and every authorisation issued under section 23, such fees as may be prescribed by the Minister; and....

By the executing the Settlement Agreement the company has acknowledged its liability in so far as a breach of licence requirements is concerned and cannot now plead that Development Agreement, [which was principally concerned with licence fees] in its defence, since the Development Agreement was expressly revoked by the Minister and the company impliedly accepted the revocation when it executed and paid moneys in accordance with the compounding provisions of the Settlement Agreement.

In fact a further settlement Agreement was made on 11 December 2004 when MV Young Chiu, MV Yung Hong 102, MV Young Chang 102 were again acknowledged by the company to be fishing in breach of section 16 of the Act. The claim in paragraph 19 (b) also fails.

By para 19 (c ) the plaintiff pleads the failure to issue fishing licences for 10 fishing vessels of the company, although USD$5K was paid as agreed under the Development Agreement. Since the money paid by way of fees for licences, [apparently at the discretion of the plaintiff in choosing 5 instead of its 10 fishing boats] did not comply with the approved fee schedule and since the Development Agreement was not only voidable but void ab initio, there is no basis for this claim.

In any event, the discretion whether to issue licences rest with the Director in accordance with compliance with necessary requirements of the Act. The company cannot seek to rely on purported promises by an employee of the Department, promises which are in fact hearsay in these proceedings.

Paragraph 19 (d) again relies on the purported authority of a servant or employee to authorize fishing pending the issue of licences, when the Managing Director of the company, on his own evidence knew that to be illegal. For these reasons this plea fails.

No boats were licenced to fish. It is not available for the plaintiff now to say there was a failure to issue the licences after moneys were paid, the licences are discretionary within the power of the Director subject to various compliances and payment of the schedule fees.

I have said all of this (notwithstanding the further amended defence) since it is plain the proceedings have been instituted by ordinary claim pleading the tort of negligence.

The further amended defence raises a totally different issue, one which has not been effectively refuted by the claimant.

That is the proceedings are primarily one for judicial review of the findings of the Minister to be found in his letter of revocation and the claimant has by-passed the need for leave to institute his proceedings by adopting the course that he has, by way of a tortious remedy. For, as I said earlier, the facts stem from documents, uncontested, documents, which rely for their effectiveness on the underlying law as it affects fisheries. So in this case cross-examination is of limited value if at all, for the relevant documents are in issue and as I say, the letter of revocation by the Minister is the crux of the matter.

A good illustration of the purpose of judicial review are those words of Lord Denning MR in Reg. v Director London Council, Ex parte Blackburn^[1]:-

“I regard it as matter of high constitutional principle that there is good ground for supposing that a government department or a public authority is transgressing the law, or is about to transgress it, in a way which offends or injures thousands of Her Majesty’s subjects, then any one of those offered or injured can draw it to the attention of the courts of law and seek to have the law enforced, and the courts in their discretion, can grant what even remedy is appropriate”

I am also minded to look again at the basis underlying Lord Denning’s reasoning in O’Relly v Mackman^[2] for this case is properly one for judicial review under our Rules of Court. It clearly deals with the rights and responsibilities of authorities acting in accordance with legislative powers which are impugned by the plaintiff. The tort of negligence is inappropriate in the circumstances and it choice for the procedural avenue has been unfortunate for all concerned. It the circumstances of this case, to seek redress by ordinary action instead of “complaining of a public authority’s infringement of his public law rights” by judicial review is an abuse of the process of the court. Since the protection of individuals vested with authority under statutory regimes is good public policy, the proper course would be to, by judicial review, look to those authorities acts under the legislation, not to subject them to claims of negligence. For judicial review also enable this court to award damages in appropriate circumstances, just as damages are sought there.

In this case, the plaintiff in effect says he has been injured by the act of Minister in revoking the earlier Deed to the company’s detriment. It must be presumed that the plaintiff saw that act of the Minister as wrong since the earlier Development Agreement afforded him a benefit by virtue of its heavy reduction in fishing licences fees and the opportunity to pay by instalments. So if the Minister acted wrongly he may be said to have failed in his public duty and this failure would give rise to a claim for judicial review. In the circumstances of this case, the Minister clearly had right on his side.

The Minister was the responsible authority for determining licence fees and no delegation is apparent.

The purported reduction of licence fees in the Development Agreement had no basis in law in the absence of a power of delegation in the Act, a power purportedly delegated to the Secretary of the Department who entered into the deed. No such power is pleaded or shown. In fact the “injury” is to the “thousands of Her Majesty’s [Solomon Island] subjects” whose expectation for licence fees in accordance with those determined by the Minister is thwarted by the supposed Development Agreement made beyond authority. Had proceedings been instituted, seeking judicial review, the hurdle at the leave stage would not be overcome.

I accept the further amended defence by its terms, successfully defeats the claim and for these reasons, I allow the application to strike out the claim for it neither disclose a causes of action in negligence nor justifies this courts consideration, if viewed as an application for leave for Judicial Review (although not couched as such).

For all these reasons, the claim must fail.

The Writ of Summons is dismissed. The defendant shall have its costs of the proceedings from the plaintiff.

BY THE COURT

Mwanesalua DCJ

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^[1] (1976) 1 WLR 550, at 559
^[2] [1983] UKHL 1; [1983] 2 AC 237