Sam v Omex Ltd [2014] SBHC 56; HCSI-CC 76 of 2013 (27 May 2014)

IN THE HIGH COURT OF SOLOMON ISLANDS
Civil Jurisdiction

BETWEEN:

MOSES SAM, TIMOTHY PAPANGU &
OTHERS
1st Claimants

AND:

CHIEF SAVINO LAUGANA, JOSEPH
MANEHEMOSA & OTHERS
2nd Claimants

AND:

OMEX LIMITED
1st Defendant

AND:

GULF FIVE LIMITED
2nd Defendant

Mr. D. Marahare for the 1st and 2nd defendants/Applicants.
Mr. A. Rose for the 1st and 2nd Claimants/Respondents.

Date of hearing: 29 April 2014.
Date of Judgment: 27 May 2014.

RULING
Apaniai, PJ:

Introduction.

1. This is an application by the 1st and 2nd defendants, Omex Ltd and Gulf Five Ltd ("Applicants"), seeking to have this claim struck out on the ground that the claim is frivolous and vexatious and an abuse of the court process.
   
2. The Applicants contend that the claim is one and the same claim as Civil Case No. 283 of 2012 ("CC. 283/12") which was discontinued against the Applicants on 5 March 2013 and followed by the execution of a Deed of Release & Settlement ("Deed") between Onesimo and the Applicants on 13 March 2013. They argue that the Deed is a bar to the 1st and 2nd claimants ("Respondents") lodging this claim and, for that reason, they say that the claim is frivolous and vexatious and is an abuse of the court process.
   
3. They have initially sought orders for the joinder of Onesimo as 3rd defendant and for consolidation of the present claim with CC. 283/12. However, at the hearing, Mr. Marahare, of counsel for the Applicants, has decided to vacate the application for joinder and consolidation and to proceed only with the application for dismissal of the claim on the ground stated above.
   

Issues:

4. The first issue in this application is whether the present proceeding is one and the same as CC. 283/12. If it is, the second issue is whether the notice of discontinuance and the Deed barred the Respondents from lodging the present proceeding.
   

The law relating to notices of discontinuance and releases:

5. A notice of discontinuance puts an end to a proceeding. Upon filing of the notice, the proceeding comes to an end and, as a general rule, except by way of appeal, no court has the power to revisit the case.
   
6. However, the discontinuance does not bar the claimant from filing a fresh claim for the same cause except that where the claim has been discontinued by leave of the court, the claimant can only file a fresh claim for the same cause by leave of the court[1]. That means where the discontinuance was made without the leave of the court, no leave is required to file a fresh action.
   
7. In the case where, upon discontinuance of the case, the parties enter into a deed of release or settlement or compromise, it has been held that such release is a contract and the normal rules of construction of written contracts apply to the construction of the deed or agreement[2].
   
8. One such rule is that the general words of the agreement will be construed with reference to the surrounding circumstances and the context in which the agreement was made so as to give effect to the object and purpose of the agreement. Furthermore, the agreement will be construed as limited to the matters, which were in the contemplation of the parties at the time when the agreement was entered into[3].
   
9. It is important, however, to note the difference between a release and a compromise. A release by way of a deed needs no consideration. A compromise, on the other hand, is the purchase of a release from an obligation. It is the element of consideration, which distinguishes a release from a compromise. As Lightman, J. said in Bank of Credit and Commercial International SA (in liquidation) v Ali and others[4] ("BCCI SA"):-
   

"In my judgement, the essential difference between a compromise and a release is that in the case of a compromise there is a release of claims for valuable consideration, and in the case of a (free-standing) release, there is no such consideration. The general rule is that a release without consideration is ineffective unless it is granted by deed or unless some form of estoppel can be established precluding enforcement of the claim released. A compromise is the purchase of a release from an obligation howsoever arising for consideration which may take any form, not being the actual performance of the obligation itself. ... Whether there is a (free-standing) release or a compromise depends on the substance (rather than the form) of the transaction between the parties and (in the absence of any suggestion of sham) where the transaction is in writing, this must be determined by examining the rights and obligations assumed by the parties under the document."

10. It is also important to note that releases and compromises are designed to resolve some actual or potential disputes between the parties to the releases and compromises and to put an end to whatever disputes there are between them[5].
    
11. To determine whether the Deed is a release or compromise, it is necessary to consider the surrounding circumstances and the context in which the agreement was made as well as the terms of the Deed itself.
    

Background to the Deed.

12. The facts leading to the execution of the Deed can be briefly stated.
    
13. In CC.283/12, Onesimo had obtained an interim order, amongst others, restraining the present Applicants from carrying out any logging activity within the Ravuneha and Honiata customary lands. No formal claim has ever been lodged against the Applicants apart from the interim orders. The evidence suggests that the alleged trespass into Ravuneha and Honiata which prompted the filing of the application in CC. 283/12 occurred between March and August 2012[6].
    
14. The interim orders were granted ex parte on 30 August 2012. However, the proceeding was discontinued by Onesimo when he filed a notice of discontinuance on 5 March 2013 followed by the execution of the Deed on 13 March 2013.
    
15. It is not disputed that Onesimo had been acting as a representative of the Kakau Roha clan in CC. 283/12. It is also not disputed that the 1st Respondents in the present application are members of the Kakau Roha clan. They did not dispute that Onesimo had represented them and their Kakau Roha clan in CC. 283/12. Their reason for lodging the present proceeding is that they disagreed with Onesimo's action in discontinuing CC. 283/12. They claim that Onesimo had not consulted them when he discontinued the proceeding.
    

The terms of the Deed.

16. The Deed was titled "Deed of Release and Settlement". It has provided for a "payment arrangement" whereby the Applicants were required to pay royalty monies due to land owners (including the Respondents' Kakau Roha clan in respect of Ravuneha and Honiata customary lands) as follows:-
    

[a] in terms of landmark "SU", 100% royalties shall be paid to Chief Siriako Usa;

[b] in terms of landmark "PC", the royalties shall be disbursed as follows:-

1. 30% to be paid to Peter Chachi;
2. 35% to be paid to Chief Siriako Usa;
3. 35% to be paid to Chief Onesimo Reinunu.
   

[c] in terms of landmark "KL", the royalties shall be disbursed as follows:-

1. 30% to be paid to Lakuili tribe;
2. 35% to be paid to Chief Siriako Usa;
3. 35% to be paid to Chief Onesimo Reinunu.
   

17. The above royalty distribution arrangement is referred to in paragraph I of the Deed as the "Settlement Agreement".
    
18. Under paragraph J, the Applicants have agreed to distribute the royalty monies in accordance with the payment arrangement set out in the Settlement Agreement and in consideration of doing so, Onesimo has agreed to "accept the payment arrangement stipulated in the Settlement Agreement in full and final satisfaction of all liabilities, demands and claims arising out of or under the Civil Proceedings" (ie, CC. 283/12).
    
19. In paragraph 1 of the Deed, the parties have again agreed that in consideration of the payment arrangement stipulated in the Settlement Agreement, the Releaser (Onesimo) shall "release, discharge and forever hold harmless" the First Releasee (Omex Ltd) and the Second Releasee (Gulf Five Ltd) with respect to, and agreed to indemnify and keep indemnified the First and Second Releasees in respect of, "any and all loss, damage and expense of any kind whatsoever (whether known, unknown, fixed or contingent) arising as a result of any and all causes of action, claim (including, but without limiting the generality of the foregoing, claims for legal costs and consequential losses) demands, actions, suits or proceedings of whatever nature (other than those given by or arising out of this Deed), which the Releasor (Onesimo) may, now or at any time prior or subsequent to the execution of this Deed, have against the First and Second Releasees with respect to or in any way connected with the Civil Proceedings (ie, CC. 283/12) or any other cause of action whatever arising thereunder or therefrom."
    
20. Under paragraph 4, the Deed binds the parties, their successors, ..., and any other parties ... controlled by or under the common control of any of them (that is, Onesimo and the Applicants).
    
21. Under paragraph 2, the Applicants may plead the release in paragraph 1 as a bar to any claim brought against them by Onesimo, his agents or any person on his behalf, for any matter arising in connection with CC. 283/12.
    
22. Under paragraph 10, the parties have given warranties to the effect that, in so far as they have executed the Deed on behalf of a party, they have been empowered by such party to execute the Deed on his behalf.
    

Discussion.

23. There is no dispute that the present proceeding has been filed by the 1st Respondents as representatives of the Kakau Roha clan. There is a second Respondent in the present proceeding who are said to be members of the Gaubata tribe. It is not very clear why they have been included as claimants in the present proceeding, however, paragraph 1 of the claim appears to suggest that they were included because they are "Chiefs and representatives of Kakau Roha and Gaubata clan" and "claim ownership of the Honiata/Ravuneha customary lands".
    
24. I have perused the application by Onesimo in CC. 283/12 as well as his sworn statement filed in support of that application and the interim injunctive orders made pursuant to that application. I have also perused the claim filed in the present proceeding as well as the sworn statements by Timothy Papagu and others in support of the application for interim injunction in the present proceeding. I see no difference in the facts averred in the pleadings and facts deposed to in the sworn statements filed in the two proceedings. The lands (Ravuneha and Honiata) which were the subject of the dispute in CC. 283/12 are the same lands which are the subject of the dispute in the present proceeding. The remedies sought in both proceedings are the same and the facts upon which the remedies are sought are also similar. In that regard, it is my view that CC. 283/12 and the present proceeding are one and the same claim and that the 1st and 2nd Respondents in this application were represented by Onesimo in CC. 283/12 and, hence, parties to that case.
    
25. It is clear to me that the object and purpose of the Deed is to put an end to CC. 283/12. It is also clear to me that the intention of the parties was to enter into a compromise and that the consideration for putting an end to CC. 283/12 was for the Applicants to distribute the royalties payable in respect of logs extracted from each of the concession areas to the respective landowners in accordance with the "payment arrangement" set out in Settlement Agreement.
    
26. In other words, the consideration for Onesimo agreeing to release the Applicants "in full and final satisfaction of all liabilities, demands and claims arising out of or under the CC. 283/12" was for the Applicants to pay royalties to the land owners in accordance with the "payment arrangement" set out in Settlement Agreement.
    
27. In my view, that is no consideration. The distribution of royalties to the land owners of the concession areas is an obligation placed upon the Applicants under the timber rights agreement relating to the logging operations being carried out by the Applicants in those concession areas. A consideration must be of some value although it need not be substantial. In the present case, the Applicants have suffered no legal detriment since they were bound to pay the royalties to the land owners in any event. A promisee can only enforce a promise if in return for it he gave something of value in the eyes of the law[7]. This is not the case here.
    

Decision.

28. It follows therefore that because the notice of discontinuance has not barred Onesimo (and, therefore, the Respondents) from filing a fresh claim for the same cause in CC. 283/12 and, furthermore, because no consideration flowed from the Applicants to Onesimo and the Respondents in return for the purported release from their liabilities under CC. 283/12, the Respondents are not barred by the notice of discontinuance and the terms of the Deed from filing the present proceedings.
    
29. In that regard, this proceeding is not frivolous and vexatious nor is it an abuse of the court process.
    

Orders:

30. The application is dismissed with costs against the Applicants on standard basis to be taxed if not agreed.
    

THE COURT

_________________________

James Apaniai

Puisne Judge.

---

^[1] Roni v Ross Mining (Solomon Islands) Ltd [1998] SBHC 144; HCSI-CC 60 of 1997 (1 April 1998); Halsbury’s Laws of England, 4^th Edition, at p. 556.
^[2] Bank of Credit and Commercial International SA (in liquidation) v Ali and others [1999] 2 All ER 1005.
^[3] Ibid.
^[4] [1999] 2 All ER 1005 at 1014.
^[5] Ibid.
^[6] See paragraphs 23, 24 and 25, sworn statement by Onesimo Reinunu in CC. No. 283 of 2012 filed 29 August 2012. The interim orders were granted on 30 August 2012.
^[7] Thomas v Thomas [1842] EngR 260; (1842) 2 QB 851, per Patteson J. at p. 859.