Mane v Evo [2013] SBHC 97; HCSI-CC 414 of 2012 (31 July 2013)

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

Civil Case No. 414 of 2012.

BETWEEN:

AARON MANE, WILLIAM HAVILEGU
Claimant
(Representing Koramata tribe)

AND:

CECIL EVO
First Defendant
(Representing Fafago tribe)

AND:

ISABEL TIMBER COMPANY LTD
Second defendant

AND:

SONIC PHASE (SI) COMPANY LTD
Third Defendant

AND:

GLENGROW (SI) COMPANY LTD
Fourth Defendant.

Date of Hearing: 15th July, 2013.
Date of Ruling: 31st July, 2013.

Mr. W. Togamae for the Claimants.
Mr. D. Marahare for the First Defendant.
Mr. W. Rano for the Second, Third and Fourth Defendants.

RULING.

Faukona J: This is a claim in category A. On 22nd January, 2012 an amended claim was filed. In the claim, the Claimants seek three orders (1) general damages for trespass (2) damages for fraud and (3) damages for unlawful conversion of round logs within konide customary land.

2. Apart from the claim, there are six applications by the parties, in terms of what appears to be preliminary matters, and one is an application to strike out.

3. By consensus counsels agree that three of the applications be heard at once. They are application for varying of restraining orders so that the 3rd Defendant is at liberty to deduct from the proceeds of operational expenses. The second application is by the Claimant for preliminary questions of law; and the third application is an application by the 3rd Defendant on the question of limitation of appeal period to the customary land Appeal Court from the Provincial Executive determination.

Application for deduction of operational expenses:

4. This is the 3rd Defendant's application and is based on Rule 5.3, seeking orders that the previous order restraining proceeds of sale of logs be varied to allow it deduct its operational expenses incurred in extraction and export of logs.

5. In his submissions, Mr. Rano relies on conventional practices upheld by the Courts in this jurisdiction, where there is dispute over ownership of logs, or dispute over ownership of land from which the logs were extracted. He emphasises that proceeds and costs associated with the extractions of logs be paid to the 2nd and 3rd Defendants. Mr. Rano appears to agree that 60% deduction set a kind of standard figure in this case.

6. Mr. Togamae in his respond reiterates his application on the question of law. Though agrees with the law in precedent related to deduction of operational expenses, a practice which almost become common; opposes in this particular cases. His reason is because the whole entire logging operations stems from fraud. He submits that while he agrees that Isabel Timber Company [ITC] owns the felling licence, it is not the same Isabel Timber Company that owns the licence from 2010. He submits that there is a new Isabel Timber Company that used the felling licence which transferred to it since 2010; the old one had died away which owned the licence from 2007 to 2010. Therefore, the incorporation of Isabel Timber Company is at stake and questionable, hence the felling licence acquired is also questionable and invalid and ought to be nullified.

7. The principle adopted and applied by authorities in this jurisdiction where the issue of deduction of operational expenses arise; seem to attain its finality. From my point of view, there are three principles been adhered to? The first is that there in existence an acceptable conventional practice. Secondly that unless special circumstances is shown the practice takes precedent and thirdly there has to be a certified costs of operatins.

8. In recognizing the practice the case authorities acknowledge it's significant for various reasons. In the case of Lagobe V Lezutuni[1] Palmer J made a general statement and said,

"To certain extend that is correct, but the fact must not be lost sight of that the sale proceeds did not arise in vacuo. It arose from the toil and sweat of persons from the use of expensive logging machinery and equipment. But for those, no sale proceeds would have been obtained. It is only proper in the circumstances therefore for reasonable expenses to be deducted and paid".

9. That statement was adopted in the case of Kalena Timber Co. Ltd V Bolopoe Corporation[2]. What His Lordship was saying is that the proceeds cannot be obtained without labour and use of machineries. Those machines are operated by men with skills, fuel to power them and spare parts to keep the machines going. This transpires as general and accepted tenor of any company or group of people involve in logging operation. His Lordship finally decided that in such circumstances reasonable expenses be deducted and paid. That is the general practice adopted and recognized by the Court in this country.

10. The case of Tropical Forest Ltd V Pou[3] the Court of appeal in recognizing the practice said on page 3, para 5, first sentence;

"Equally, a judge is not entitled to ignore the practice which has developed over a number of years in this jurisdiction".

11. The Court of Appeal finally upheld that the Judge has not taken into account the relevant consideration, and indeed one of the major considerations is the common practice. Therefore, the appeal is allowed and the case referred back to the High Court for reconsideration.

12. Again, in Poa V Attorney-General[4] His Lordship Apaniai allowed room in the fourth order allowing the Respondents to apply for the release of the certified costs of operations if they wish to do so. Such allowance affirms the acceptable common practice in this country and in so doing must be recognised.

13. His Lordship Kabui J also recognised the practice when he held in the case of Topical Resources Development Company Ltd V Tropical Forest Ltd[5], and said,

"That a contractor is under an obligation under the Agreement to be paid its dues and that should be given cognizance by the Courts and not to breach the Agreement.

14. Mr. Togamae raises the issue of fraud in incorporation of the 3rd Defendant Company, which render the felling licence acquired invalid. However, the proper remedy in such circumstance was expounded by Muria, Chief Justice in the case of Masa V Kololeana Development Company Ltd[6] where he stated profoundly at page 10;

"The Plaintiff's remedy, if the licence is found to be invalid can be adequately addressed in damages at the trial of the main action".

2nd Application:

15. Mr. Togamae submits in respond to the first application in the form of the second application. I have dealt with a portion of it in the first application. What Mr. Togamae alleges is that on 10th December, 2009 the Foreign Investment Division issued a show cause notice to Isabel Timber Company why its Foreign Investment Certificate of Investment was not cancelled. Following that, on 2nd March, 2010, the Foreign Investment Board consequentially cancelled the certificate. There was an appeal to the Minister of Commerce and Labour but the decision of the Foreign Investment Board was upheld by the Minister. On 31st August, 2010, a new Company was registered as Isabel Timber Company bearing totally new Directors and new shareholders. In September 2010 it registered itself under the new Company Act. The felling licence' which the current Isabel Timber Company possessed was in fact transferred to it by the old Isabel Timber Company which died its legal death in 2010.

16. Mr. Rano argues that there are no two companies. There is no change to Isabel Timber Company as a limited liability Company, and as to name and its persona. The only change was the shareholders.

17. I noted from the sworn statement of Mr. Johnson Vunagi that ITC was first incorporated in 31st August 1990 with company number 36 of 1990. The shareholders were Emas Pacific Limited, a foreign investor, which held 70% shares and Isabel Community Trust held 30%.

18. On or about 4th January 2008 a Board of Directors meeting was held at Sir Bishop Tuti's residence at Jejevo. At the meeting it was agreed that Emas Pacific Ltd will cease its operations and 70% shares will be transferred to Isabel Community Trust. Before actual transfer was done Mr. Wong left the Country.

19. The Minister of Commerce and Labour by his letter dated 29th April 2010, addressed to Mr. Ene who was one of the resource owners, advised on paragraph 2 (2) that Local Director can register Isabel Timber Company as a local entity and to continue with their business activities. Mr. Rano submits that is exactly what they did and on or about 31st August 2010, Isabel Timber Company was registered maintaining the same company number 36 of 1990. On 20th September 2010 Isabel Timber Company was re-registered under the Companies Act 2009.

20. After restructuring of the ITC the Commissioner of Forest was informed in regards to formalisation of the felling licence issued to ITC. The advice by the Commissioner of Forest was in his letter dated 11th November, 2010, and in paragraph 11 it said ITC is to re-execute the timber rights agreement (Standard Logging Agreement) with the new Local Trustees for ITC's current ongoing operational areas. Whether it is necessary or possible to convert that as consented for transfer or assignment of the licence as require by clause 27 of the licence.

21. My opinion on the issue of cancellation of the certificate of registration of foreign investment is that once it is done the business activities of the foreign investor ceased thereof. And the foreign investor is not allowed to engage in any business activities in Solomon Islands. The next step under the Company Act is to file liquidation process. In this case it never occurred. The consequence of cancellation of the certificate does not therefore nullify its registration or incorporation status under the Company Act. Therefore, the 30% ownership share by Isabel Community Trust is still alive, nothing has affected it. The submission that once the certificate of registration of foreign investment was cancelled under S 24 of the Forest Investment Act, ITC no longer is authorized to conduct further investment activity or logging is a misconstrue of the law. Mr. Togamae cannot rely on the case of Laumare Development V Laumare Development Company.as the fact therein is different. In the above case the Laumare Development was owned by an individual person, a Solomon Islander who died intestate. It is noted from the decision that they are entirely different entities.

22. With the instructions given by the Minister in paragraph 19, and the Commissioner of Forest in paragraph 20 above which has been complied with fully, hence there is no peculiar and conceal process in acquiring the felling licence by ITC.

23. Mr. Togamae concerns with fraud that stemmed in the incorporation of ITC and the manner it acquired the felling licence. In respect of the allegation of fraud there are two possible answers to it. One there can be no fraud because the authorities and the Minister for Commerce and Labour and the Commissioner of Forest were aware of ITC's dealings and were involved in advising ITC of what ought to be done. The second answer is that; should there be fraud which may render the felling licence invalid, hence operation invalid, then Muria Chief Justice in Mesa's case above has finalise the remedy. That the Plaintiff's remedy if the licence is found to invalid can be adequately addressed in damages at the trial of the main action.

24. This application was intended by Mr. Togamae as a response to the First application by Mr. Rano; applying for deduction of operational expenses. From what I have said herein, I therefore dismiss the second application and allow 60% deduction of operational cost be deducted and paid to Defendants 1 and 2 accordingly.

Third application in respect of time limitation to appeal to CLAC:

25. The Claimant's action premises on trespass and that the 1st and 2nd Defendants felling licence is unlawful as there been an appeal lodged to the CLAC from the Isabel Provincial Executive determination, and is still pending hearing.

26. This application is on the question of limitation of appeal period. On foot is the appeal to CLAC under Forest Resources and Timber Utilisation Act. Quite significant is the question, has the appeal to CLAC filed within one month as stipulated by Section 10 (1) of the Forest Resources and Timber utilisation Act (FRTUA). S.10 (1) confers jurisdiction upon CLAC to decide issues on timber rights, which was appealed from the Provincial Executive determination.

27. The Provincial Executive delivered its decision on 13th December 2006 by way of publication at konide substation. Time then starts to run from 14th December 2006. As such, the last day in which an appeal could have been filed was 15th January, 2007. By 15th January 2007, no such appeal was filed.

28. On 8th February 2007, a purported letter of appeal was received by the Magistrates Court in Honiara. On the same date a payment of $100.00 appeal fee was received and receipt number B1195953 was issued.

29. By letter dated 18th February, 2007, having heard that their intended notice of appeal was out of time, and by paragraph 3 expressed if extension of appeal period be allowed. One reason was they did not receive a copy of the determination until 11th February 2007.

30. By letter dated 27th February 2007, Mr. Dayson Boso (Court Clerk) informed the Claimants to pay further $313.00 for security for costs and photocopy cost.

31. On 12th March 2007, the Local Court Officer Mr. Paul Ngaingeri informed Mr Havilegu (one of Claimant) that the Chief Magistrate had accepted his letter of intention to appeal based on the reason verified therein. Mr Ngaingeri then advised Mr Havilegu to lodge or file his appeal points not later than 21st March, 2007, and other outstanding fees be paid on the same date. On 16th March, 2007, Mr Havilegu filed grounds of appeal.

32. On 9th February, 2010, Mr. Samani clerk to CLAC Isabel District wrote to the Commissioner of Forest that Mr Havilegu's appeal was out of time.

33. It is clear that there is no evidence as to whether the amount of $313.00 being for security for costs and photocopying cost were ever paid. If not paid I concur with Mr. Togamae that will not render appeal out of time; however, the consequential effect of non-payment is that there is no guarantee the appeal will be ever heard.

34. Upon reading of S.10 (1) it appears to be in a mandatory term. It does not give any discretionary power to the Magistrate to extend time limit on appeal, or to entertain an appeal filed after the time limit had expired. The words "may within" used in the section imposes a restriction as to time. In my opinion, discretion as may refer to in the words is conferred on the aggrieved party. If he so wish can appeal if not the matter ends. If he so wish must file his appeal within one month from the date the notice of determination was published.

35. In the case of David Grant & Co. Pty V Westpac Banking Corporation[7], the High Court of Australia in a similar factual situation said that the term "may only" is to define the jurisdiction of the Court by imposing requirement as to time as an essential condition of the right conferred. The case actually imposes restriction as to time. It does not confer upon Court any discretionary power.

36. Rule 16.12 (b) confers discretionary power in the High Court where no time limit is provided for an appeal against a decision of an inferior Court. Rule 16.13 an application for further time must be accompanied by a sworn statement showing the nature of the case in summary, questions involved and the reason why extension of time should be given.

37. I could perceived as good practice and fair, though not mention specifically by the Rules, any application for extension of time be universally adopted by both in the Magistrates Court and in the High Court provided the requirements are met. The basic reason in my view is that circumstances will not always be the same. There may be genuine reason for being late and extension of time is needed.

38. In this case, there is no evidence to show that there was a formal application for further time. In the case of Patatoa V Talauai[8], the Court held that for an appeal to be valid, must be properly brought as prescribed by any provisions applying to it within the three months period, Section 231B (1) Lands and Titles Act. There was no power to extend that period. As the Local Courts [Fees in Civil Cases] Rules required payment on appeal, meant that the appeal was not duly brought within three months period, as the fee had not been paid. No action outside the three months could cure the defect – Seselono V Kikiolo[9].

39. The question whether the appeal has merits or not is a non-issue, Kinisite V Maemarine[10]. In that case, the Court held that where was no appeal filed within 3 months there is no justiciable matter before the Court to decide. In other words, there is no cause of action or proceedings before the Court to entertain and draw conclusion upon.

40. On the issue when a cause of action is supposed to accrue to entitle the Claimant to commence an action and when the time starts to run, Mr Togamae refer to the case of Nano V Riringi, Katovai V Lumukana[11], and agree that right of appeal would start to run in three circumstances:

1. When the decision is announced in the presence of both parties.

2. Where it is announced in the absence of both parties who failed to appear after notice was given.

3. When it is received by a party if sent by post. In any event time cannot run against a party until he has actual or deem notice of the decision.

41. In furtherance, the time to appeal starts to run after the party aggrieved by the decision. In Nano case the Court said,

"... that the words 'person aggrieved " are given a real meaning in that the person concerned must have actual or deemed knowledge of the decision before time runs, he may realistically be described as a "person aggrieved " throughout the period.

42. In this case, the person aggrieved is William Havilegu. He received the notice and the decision on 11th February, 2007. That was the date he actually received the notice and the decision.

43. The Nano case has correctly point out three circumstances where right of appeal would start to run. Option 2 and 3 now seemed dormant or not applicable anymore. The fact is that option 2 and 3 are common practices often resort to in the Local Court and the Customary Land Appeal Court many years back. Today I am not aware whether option 2 and 3 are still alive and applied. In any event they are conventional practices. Nothing of option 2 and 3 is mentioned in the Local Court Act or in the Land and Titles Act. In this case S 9 (2) (b) of Forestry Act expressly stated that notice of determination must be in the manner as notice under S. 8 (2) was given. Notice of hearing was displayed at konide substation. It was the same place in the same manner the notice of determination was published.

44. If indeed was pronounced by the Premier that the determination be sent to the parties, that is not the manner prescribed by law (FRTUAct). This is different from the practices adhered to by the Local Court and Customary Land Appeal Court. It has to be noted that parties to a timber rights hearing cannot expect minutes and Executive determination be posted or sent to them. That will be contrary to Section 9 (2) (b) FRTU Act.

45. FRTU Act does not provide another different exit apart from S. 9 (2) (b). The question is whether the Claimant's appeal is barred by the limitation of time. See Meleuto V Commissioner of Lands[12].

46. The letter of 12th March, 2007 by the Local Court Officer explained that the Chief Magistrate had accepted the Claimant's appeal out of time. If that was a decision, where in law has it confer upon the chief Magistrate to exercise his discretionary power to extend limit of the appeal period.

47. If there are provisions available was there being an application properly brought before the Chief Magistrate who upon exercising his discretion decided as it was. If there was any, there is no evidence an application for breach of time was properly and formally brought. The decision made by the Chief Magistrate extending time limit was merely an administrative function and not of which the law conferred upon a judicial officer so to do.

48. In conclusion, case authorities of which mostly refer to S.231(B)(1) of the Land and Titles Act which provide appeal within three months. In this case, the appeal to CLAC is under FRTUA. However, the principle in law is the same. In Patatoa V Talauai the Court said for the appeal to be valid must be properly brought within three months required by S. 231(B)(1) Land and Titles Act. If appeal fee is not paid within three months it prevents the appeal from being brought. Once three months period has elapsed payment cannot cure the defect expounded in Seselono case in which the Court upholds the same principle. If nothing is lawfully justiciable before the Court at the end of three months then no act by anyone thereafter can cure the matter, as that act would constitute bringing an appeal outside of limitation period. The principle in Kinisita V Maemarine above was applied in Patatoa V Talauai and Seselono V Kikiolo. The Courts had stated very clearly that there is no provision for extension of time limit. This also applies in Forest Resources and Timber Utilisation Act. The Chief Magistrate does not have any jurisdiction to extend any time limits. If no appeal been filed within one month, there is no justiciable matter before the Customary Land Appeal Court and simply cannot entertain the appeal.

49. Though I am urged to exercise the High Court's inherent jurisdiction in this instances, to demonstrate justice according to law; I am afraid, I am not convinced. I am bound by the Solomon Islands case authorities refer to in this case. Even to the extent to be flexible, see Reef Pacific Limited V Island Enterprise Limited,[13] that procedural rigidity should no longer allowed to be applied.

50. The precedent has been laid down and that cannot be swayed.

Orders:

1. Application for deduction of operation expenses granted, that 60% of Sale proceeds be deducted or discharged and payable to Defendant 1 and 2 base upon certification of costs.

2. Consequential to order 1, I therefore refuse to grant second application.

3. That the appeal filed by Mr. William Havilegu on 8th February, 2007, to the Central Islands Customary Land Appeal Court against the Isabel Provincial Executive determination, given on 13th December, 2006, is out time. That appeal therefore must be dismissed.

4. The cost incidental to this application be paid by the Claimants to Defendants.

The Court.

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^[1] [1995] SBHC 77; HC-CC102 of 1994 [24^th April 1995].
^[2] [2013] SBHC 4; HCSI-CC 362 of 2012 [29^th January 2013].
^[3] [2007] SBCA 18: CA-CAC 26 of 2006 [10^th May 2007].
^[4] [2011] SBHC 110; HCSI-CC 223 of 2011 [27^th June 2011].
^[5] [2004] SBHC 106; HCSI-CC 366 of 2004 [22^nd November 2004].
^[6] [1996] SBHC 16; HCSI-CC 361 of 1995 [29^th March 19967].
^[7] [1995] 69 ALJR 778
^[8] [1983] SBHC 13; [1983[SI LR 112 [2 May 1983).
^[9] [1982] S 1 LR 15.
^[10] [2000] SB HC 89; HCSI-CC 397 of 1999 [19 April/2000].
^[11] [1984] SI LR 9.
^[12] [1987] SBHC 83; HC-CC 1997 [13 May, 1998].
^[13] Civil Appeal No. 1 of 1992 [CA]