Voge Timber Export Ltd v Haro [2014] SBHC 166; HCSI-CC 432 of 2013 (5 November 2014)

IN THE HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction
(Maina J)

Civil Case No. 432 of 2013

BETWEEN:

VOGE TIMBER EXPORT LTD
Claimant

AND:

DAVIS HARO
1st Defendant

AND:

CALTON GRANDLEY
2nd Defendant

Date of Ruling: 5th November 2014

Mr. Laurere. N for the Claimants/Respondent
Mr. Tagini. M for Defendants/Applicant

RULING
Maina J:

Introduction

There are two applications before the Court and relates to the claim filed under Category A by the claimant company on 13th November 2012.

An inter parte hearing on the interlocutory injunction made on 26th February 2014 and the defendants' application filed on 6th June 2014 to vary the interlocutory injunction order.

The interim order of 26th February 2014 restrained the first and second Defendants from interfering and disturbing the lawful conduct of the Claimants business activities including the Claimant's logging operation within Arovo and Gae customary land in Marovo Lagoon Western Province und Felling Licence No. TIM2/84.

Claimant's Submission

For the Claimant, counsel Laurere submitted two written submissions for the applications and relied on the following documents:

1. Claim filed on 13th November 2011.
2. Application filed on 17th February 2014.
3. Sworn statement of Wince Haro filed on 17th February 2014.
4. Sworn statement of Wince Haro filed on 4th July 2014.
5. Sworn statement of Stanley Lavu filed on 12th August 2014.
6. Undertaking as to damages filed on 17th February 2014.
7. Ex parte order of 26th February 2014.
   

The counsel Laurere submitted that a claim has been filed against the Defendants and interim order made to restrain the Defendant.

It is now before the Court for inter parte hearing of the application with the interlocutory orders of 26th February 2014.

Counsel made reference to the general law injunction by Lord Diplock in the case American Cyanamid –v- Ethicon Ltd [1975] AC at p 407 and in particular to the 4 limb tests. He made his submission to support the tests.

With the variation order sought by the Defendants, counsel submits the application is unrelated and so it is a new application. He said the supporting sworn statement of Davis Haro do not say anything about royalty payments.

According to the sworn statement of Wince Haro both the Defendants has no locus standi as both are neither directors nor shareholders of the claimant company.

Defendants Submissions

Counsel Tagini for the Defendants in his submission relied on the sworn statement of Davis Haro and shows that the claimant company is a dormant company and Wince Haro is not a director or chairman and has no authority to sign any logging agreement on behalf of the claimant company.

He made reference to the incorporation of the company and his client Davis Haro was one of the directors. Wince Haro who is the administrator was not a director or a shareholder. The two shareholders Lawrence Harry and Frank Haro have died and no one attempt to file any application for the estate of the company owned by the deceased. In other words, there was no proper transfer of the shareholders and the directorship since the dead of the directors.

On the restraining orders counsel said the braining (Wince Haro) behind the order has no locus standi or standing and the order be discharged for his client Davis Haro, he is a director as shown in the extract extracted from the company house.

Counsel Tagini submitted that there was a change of three directorships of the company but unlawful as they did not follow the appropriate procedures to the transfer of shares and change of directors as it can only be done by the letter of administration.

With the application for variation, counsel said it is supported by the sworn statement of Davis Haro. The royalty should not be paid to the claimant company as it has no proper directors.

In reply to this application as new application Defendants said, it covers in the orders as the company rely of the royalties for its operations.

Defendants also seek for the interlocutory order and the current directors be restrained from the administration of the claimant company. And the current royalty of all shipment be restrained and put into trust account of the lawyers.

Variation of Ex parte order

Defendants applies for the variation of the ex parte order as there is a dispute on the directorships of the claimant company and so the royalties should be restrained from the hands of those who are not properly appointed as directors.

What is clear from the documents before the Court and with the parties is this company administers the interests and business activities of the landowners or beneficiaries of the logging operation within Arovo and Gae customary land. Their shareholders/directors have all died and parties who are also beneficiaries are arguing or have problem with the directorship.

Currently the Claimant company operates under the hands of the beneficiaries and logging operation still continues. The parties do not want to disturb the felling of the trees for export in the midst of the dispute over directorship in the Court.

What seems be clear is that there are no directors rather company operates under the hands of beneficiaries. And also there is no direct allegation on the handling of royalty except the allegation of using company's entitlement by the directors not properly appointed. The fact the claimant company still administers the interest of the Arovo and Gae customary land for the beneficiaries and both parties agrees for the logging activities to continue despite their dispute on the directorships, it is my view that granting the variation would not be for the interest of the beneficiaries.

Therefore, the variation order sought is refused.

Analysis issues on Interlocutory Injunction

As pointed out earlier by Counsel Laurere the general law injunction is by Lord Diplock in the case of American Cyanamid –v- Ethicon Ltd [1975] AC at p 407 and in particular to the 4 limb tests.

Such or injunction is discretionary and usually granted as to maintain status quo while the matter is pending determination by the Court.

Triable Issues

I have read the sworn statements and documents by both parties and satisfied that there are triable issues been raised in this case. Among them are the directorships of the claimant company, issues of the holder of felling licence No. TIM2/84, changes of directors of the claimant company and issues of the power of attorney relates to the transfer of the felling licence.

Balance of Convenience

At this point of time the balance of convenience in the circumstances of this case would be to maintain the status quo until the issues are finally determined.

There is the undertaking for damages filed by Claimants in the event that the decision goes against them. This favours their case for restraining orders to be issued.

Locus Standi

Both parties have shown their interest in the claimant company as Davis Haro's name appeared in the company house certificate. Sworn statement produced by the Claimant shows that Davis Haro was changed as director for the claimant company.

Adequacy of Damages

The operation of felling logs is still continuing except the handling of the claimant company by them is in dispute and I do not think it create any substantial damages.

Strength of Parties Case

The strength of the party's case at this point of time is more in favour of the Claimant when reading the documents before me. But the final judgment will made later when determining the main issue.

Restraining Orders issued

I am satisfied and confirm the interlocutory injunction order granted to the claimant company and the orders to continue.

ORDERS

1. The application for variation of ex parte of 26th February 2014 is refused.
   
2. The interlocutory injunction order made by me on 26th February 2014 is confirm the orders and to continue until the main claim is dealt with by the Court.
   
3. A penal notice to be attached to Order 2; and
   
4. Costs to the cause.
   

The Court

.................................................................
Justice Leonard R Maina
Puisne Judge