Greenhill Enterprises Ltd v Pacific Crest Enterprises Ltd [2014] SBHC 156; HCSI-CC 23 of 2014 (21 November 2014)

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Jurisdiction

BETWEEN:

GREENHILL ENTERPRISES LIMITED
Claimant

AND:

PACIFIC CREST ENTERPRISES LIMITED
1st Defendant

AND:

ATTORNEY-GENERAL
2nd Defendant
(Representing the Premier of Rennell & Bellona Province)

M. Pitakaka for the Claimant
C. Hapa for the 1st Defendant
J. Muria Jr for the 2nd Defendant

Date of Hearing: 14 July 2014
Date of Judgment: 21 November 2014

RULING

Apaniai PJ:

1. This is an application by the 2nd defendant seeking an order that the claim be struck out on the ground that the claim is frivolous and vexatious or that it discloses no reasonable cause of action.

2. Striking out a claim, and dismissing a case summarily, is a drastic action which should be done only in very clear cases where the claim is baseless and does not disclose cause of action.

3. It should be done only where the statement of claim and the ultimate facts asserted therein do not disclose even an arguable case. It is not in the interest of justice that such a case should be allowed to proceed.

4. In deciding the question whether a reasonable cause of action is disclosed, the court looks only at the claim and considers the facts asserted in the statement of the case and then decides whether, assuming that the asserted facts are true, there is a viable case against the defendant for the relief sought[1]. In doing so, the court does not require extrinsic evidence to show whether there is a cause of action, nor will the court carry out a minute examination of the documents and facts of the case to see whether the claimant does have a cause of action[2]. To do that would not only be to usurp the function of the trial judge, but would lead to deciding the merits of the case on sworn statements only, without discovery and without oral evidence tested by cross examination[3].

5. However, where the statement of claim and the ultimate facts asserted therein do not disclose even an arguable case, or, where a point of law has been raised which makes it so clear that the claim does not have a chance of success, time should not be wasted in allowing the case to continue.

6. This claim concerns a plot of land located in West Rennell known as Lughughi. The land has been sub-divided into two plots of land which were registered as parcels of PN 291-001-2 & 3 and 298-002-3 & 4. Both parcels of land were registered in the name of the Premier of the Rennell and Bellona Province. The total area of both lands is approximately 16.17 hectares.

7. Of the 16.17 hectares, 6 hectares were purportedly leased to ETH Global Investment & Partners Ltd ("ETH") pursuant to an agreement signed between the 2nd defendant and ETH on 23 January 2008. The purpose for leasing the 6 hectares was for the claimant to build a campsite, a log pond, anchorage, wharf and a storage area for machineries. For convenience, I will be referring to the 6 hectares of land as the "log pond area".

8. On 28 August 2008, ETH sub-leased the log pond area to the claimant and Solomon Eco Lumber Ltd ("SELL"). Despite the purported lease of the log pond area to ETH, the 2nd defendant had allowed the 1st defendant to use the areas for the 1st defendant logging operations pursuant to an agreement signed between them dated 6 March 2014[4]. Following that permission, the 1st defendant attempted to land its logging machines at the log pond area on 26 January 2014 but was prevented from doing so by the claimant and its security personnel.

9. Fearing that the 1st defendant might again try to enter the log pond area, the Claimant now comes to Court seeking the following remedies:-

[1] a declaration that it has a valid sub-lease over 6 hectares of PN 291-001-2 & 3 and 298-002-3 & 4;

[2] A declaration that it is entitled to the sole and exclusive use, occupation and enjoyment of the leased land;

[3] That the defendant, its servants, agents, invitees and others be permanently restrained from entering the leased land;

[4] That the Police Commander at Tingoa, Rennell & Bellona Province and any police officers under his direction forthwith upon receipt of this order and upon request of the Claimant or its solicitor shall attend to and enforce these orders hereof using such force as is necessary for the purpose;

[5] Damages for trespass;

[6] Costs on indemnity basis;

10. None of the defendants have yet filed a defence. However, the 2nd defendant has filed this application seeking that the claim be dismissed alleging that the claim is frivolous and vexatious or that it discloses no reasonable cause of action.

11. The reasons for asserting that the claim is frivolous and vexatious or that it discloses no reasonable cause of action appear to be the non-registration of the sub-lease obtained the consent of the 2nd defendant when it sub-leased the log pond area to the Claimant and SELL.

12. There is no dispute that the lease between the 2nd defendant and ETH was a duly registered. There is also no dispute that the sub-lease by ETH to the Claimant and SELL was not registered.

13. In relation to leases, the law is clear. Section 146 of the Land & Titles Act (Cap. 133) ("Act") requires that a lease for a specified period exceeding two years must be in the prescribed form and must be completed by opening a register in the name of the lessee, filing the lease and registering the lease as an encumbrance in the register of the lessor's estate or lease. These are mandatory requirements which must be satisfied.

14. Section 2 (1) defines "lease" as including sub-lease. That means a sub-lease must also satisfy the requirements of a lease as mentioned in paragraph 13 above otherwise the sub-lease will not be a valid lease under the Act.

15. The Land and Titles (General) ("Regulations") has prescribed a number of forms to be used in connection with transactions under the Act. Hence, the requirement in section 146 of the Act for a lease to be in the prescribed form means that the lease must be in the proper form prescribed in the Regulations[5].

16. In the present case, the sub-lease was for a period of ten years[6]. Section 146 of the Act requires the sub-lease to be registered. To be so registered, it must be in the prescribed form. Unfortunately, the sub-lease was not in the described form, Unfortunately, the sub-lease was not registered, it creates no effectual interest in the land.

17. Under section 166 (1) of the Act, every instrument creating, or purporting to create, a registered interest in land, must be registered. Where the instrument is not registered, it crates no effectual interest in the land[7].

18. Because the purported sub-lease in the present case was not registered, it follows that the sub-lease is not an effective sub-lease agreement and since this claim is based on that ineffective sub-lease agreement, it means that there is no cause of action. This application therefore succeeds on that ground.

19. The applicant also submits, in effect, that the Claimant has no locus standi to claim against the 1st and 2nd defendants because the agreement entered into by the 2nd defendant was one between the 2nd defendant and ETH and that the Claimant was not a party to that agreement. In other words, there is no agreement between the 2nd defendant and the Claimant on which the Claimant could found a claim.

20. I think I can dispose of that submission briefly. In my view, the remedies sought in the claim are founded on the sub-lease agreement between the 2nd defendant. That submission is misconceived and I reject it.

21. Finally, the applicant submits that the sub-lease is not valid because the 2nd defendant has not given his consent for the sub-lease. In my opinion, the application must also succeed on this ground. While, by virtue of clause 3 (1) (b) of the lease agreement, the 2nd defendant had given consent for ETH to enter into sub-lease arrangements with the Claimant and SELL, section 203 (1) and (2) of the Act requires that such consent must be verified in the prescribed manner. This has not been done. This means that there is no effective consent for the sub-lease agreement.

22. The orders of the Court are:-

[1] The application is granted.

[2] The claim is struck out.

[3] The Claimant to pay the costs of the applicant and the 1st defendant on standard basis to be taxed if not agreed.

THE COURT

J. Apaniai
Puisne Judge

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^[1] Earthmovers (Solomons) Ltd (trading as Pacific Timbers) – v – Samuel Thao & Others (trading as Aola Timber Exports Agency) – cc No. 65 of 1997.
^[2] Kimitora V HFC [1998] SBHC 53; HC-CC 01 of 1998 [9 March 1999]
^[3] Wenlock V Moloney & Others [1965] 2 ALL ER 871.
^[4] See exhibit “LT5”, sworn statement by Hon. Lence tagosia filed 13 March 2014.
^[5] See also section 160 (1) and (2) of the Land & Titles Act.
^[6] See clause 1 (c) of the Lease agreement between ETH and SELL and Green Hill Enterprise Ltd, exhibit “PSW4”, sworn statement by Paul Siew Hong filed 30/01/2014.
^[7] See section 117 (1) of the Land & Titles Act.