Glengrow (SI) Ltd v MSL Logging Company [2014] SBHC 153; HCSI-CC 155 of 2014 (12 September 2014)

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Jurisdiction

BETWEEN:

GLENGROW (SI) COMPANY LIMITED
Claimant

AND:

MSL LOGGING COMPANY
1st Defendant

AND:

MOGHAO TIMBER HOLDINGS
2nd Defendant

AND:

ATTORNEY-GENERAL
3rd Defendant

For the Claimant: D. Marahare
For the 1st and 2nd Defendants: C. Fakarii
No appearance for the 3rd Defendant

RULING

Apaniai PJ

Introduction.

1. This is an application by the claimant seeking interlocutory orders against the 1st and 2nd defendants. The orders seek to restrain the 1st and 2nd defendants from conducting logging operations in Lot 18 of LR 516 pending trial; for the defendants to remove their logging machines from Lot 18: for the defendants to sell any logs already felled and pay the proceeds into court; for the defendants to account for the proceeds of previous sales of logs extracted from Lt 18; and for the defendants to refrain from engaging in any negotiations in relation to Lot 18.

Principles governing Granting of interlocutory orders:

2. The principles applicable to any application for interlocutory or interim restraining orders are clear. The applicant must show that there is a serious issue to be tried, that damages will not be an adequate remedy, that the balance of convenience favours the Granting of the interim orders, and that the applicant has given the usual undertaking as to damages.

Serious issue:

3. In regards to the serious issue, the claim, or the sworn statement in support of the application, must disclose an issue that is worth investigation at trial. That is to say, the issue must not be vexatious or frivolous. There is a serious issue if some legal or equitable rights of the applicant have been invaded or threatened to be invaded by the defendant. The evidence must show what those rights are and that the defendant has invaded, or is threatening to invade, or is threatening to invade, those rights.

4. If no serious issue is disclosed, the application must be dismissed forthwith without having to consider the others issues.

5. In this case, the claimant does not claim ownership of Lot 18. Its claim is that it has an interest in Lot 18 because it has a Grant of profit[1] ("Grant") over Lot 18 as well as a logging and development agreement[2] ("Agreement") and a logging licence[3] ("Licence") to conduct logging operations therein.

6. In the claim, the claimant says that the Grant relates to Lot 18 of LR 516 of PN 071-001-17 and that it is valid for 5 years commencing 17 February 2012. It says it was a Grant made by the Premier of Isabel Province who is the registered owner of PN 071-001-17 of which Lot 18 is a part. It says that the terms of the Grant is governed by the Agreement. The Grant shows that the Grant is to be enjoyed in common with the Premier of Isabel Province.

7. In the case of the Licence, it is clear that the Licence was issued on 16 November 2012 and is valid until 16 November 2017. As regards the Agreement it is also clear that the agreement was signed on 14 February 2012. The duration of the Agreement is not clear but there is a clause for termination by the Premier[4].

8. An important part of the Agreement is contained in the First Schedule to the Agreement whereby the Premier has demised to the claimant all rights to the trees, etc, in "Lot 17 and Lot 18 of LR 516". Since the terms of the Grant are governed by the Agreement, it may be assumed that the Grant covers only Lots 17 and 18 of LR 516 and not the whole of PN 071-001-17. This qualification, however, has not been noted in the encumbrance section of the title to PN 071-001-17. In fact, according to a letter from the Registrar of Titles[5], there is no Lot 17, Lot 18 or LR 516 to PN 071-001-17. That plot of land is simply PN 071-001-17.

9. The claimant alleges that the defendants have trespassed into Lot 18 and have removed logs therefrom. It is alleged that this was done when the defendants were carrying out logging in Lot 2 of PN 071-001-2. It is not disputed that the 2nd defendant has a Grant of profit over Lot 2 of PN 071-001-2.

10. The defendants have denied that they have at any time trespassed into Lot 18 or removed logs therefrom. They say that the logs which the claimant says were removed from Lot 18 are in fact logs felled from Lot 2 of PN 071-001-2.

11. That being the case, there can be no dispute that there is a serious issue to be tried in this proceeding.

Adequacy of damages:

12. This is not a case where ordinary village people are seeking to protect their land and environment from destruction by logging companies. It is a case where a logging company (that is, the claimant) is alleging trespass and unlawful removal of logs by other loggers (that is, the 1st and 2nd defendants) from its concession area. That being so, the question is whether damages would be an adequate remedy instead of issuing restraining orders. I am satisfied this is a case where damages would be an adequate remedy.

Balance of convenience:

13. In ascertaining the balance of convenient, the questions to ask is whether it would do more good than harm if the orders sought are granted or, conversely, whether it would do more harm than good if the orders are granted.

14. In considering these questions, the issues to consider are, first, whether, If injunction is denied but the claimant wins its case in the end are the defendants in a position to compensate the claimant. If the defendant is not in a position to compensate the claimant, injunction should be granted.

15. Second, if injunction is granted but the claimant loses its case in the end, is the claimant in a position to compensate the defendants? If the claimant is not in a position to compensate the defendants, injunction should not be granted. If the claimant is in a position to compensate the defendants, injunction should be granted.

16. Third, if none of the parties is able to compensate the other, then, the court should consider granting the injunction so as to maintain the status quo until trial of the claim.

17. Unfortunately, neither party has produced any evidence in regards to their financial status to enable the court determine their financial capability to pay compensation should interim orders be, or be not, made.

18. In those circumstances, it seems to me that the only option is to impose interim restraining orders to maintain the status quo until trial of the claim.

Usual undertaking as to damages.

19. I noted that the claimant has made the usual undertaking as to damages. This is an added ground to imposing restraining orders until trial.

Decision and orders.

20. I am satisfied an order should be made to restrain the 1st and 2nd defendants from trespassing into Lot 18 of PN 071-001-17 and from felling and removing logs therein.

21. The orders sought in paragraphs (1) to (7) of the urgent Application for Interlocutory Orders filed by the claimant on 26 May 2014 are therefore granted.

THE COURT

J. Apaniai.

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^[1] See exhibit “YKS-10”, additional sworn statement by Yien King Shou filed 19 June 2014
^[2] See exhibit “YKS-2:, sworn statement by Yien King Shou filed 26 May 2014
^[3] See exhibit “YKS-1:, sworn statement by Yien King Shou filed 26 May 2014
^[4] Clause 38, Logging & Development Agreement, exhibit “YKS-2:, sworn statement by Yien King Shou filed 26 may 2014.
^[5] Exhibit “JY-1”, sworn statement by Jimmy Yien Chin Sing filed 2 July 2014.