Asia Pacific Investment Development Ltd v Samlimsan (SI) Ltd [2015] SBHC 112; HCSI-CC 371 of 2015 (11 December 2015)

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

Civil Case No. 371 of 2015

BETWEEN:

ASIA PACIFIC INVESTMENT
DEVELOPMENT LIMITED
Applicant/Claimant

AND:

SAMLIMSAN (SI) LIMITED
1st Respondent/Defendant

AND:

SPRINGHILL LIMITED
2nd Respondent/Defendant

AND:

GREEN HILL ENTERPRISES LTD
3rd Respondent/Defendant

AND:

PACIFIC CREST ENTERPRISES LTD
4th Respondent/Defendant

AND:

TROPICAL FRONTIER DEVELOPMENT
CO. LTD
5th Respondent/Defendant

AND:

AMOS COMPANY
6th Respondent/Defendant

AND:

MUGIHENUA INVESTMENT CO. LTD
7th Respondent/Defendant

AND:

ISLES TROPICAL TIMBERS LTD
8th Respondent/Defendant

AND:

MUGABA ATOL RESOURCE COMPANY
9th Respondent/Defendant

AND:

MUGABA TIMBER COMPANY
10th Respondent/Defendant

AND:

MACRANKA TIMBER ENTERPRISES
LTD
11th Respondent/Defendant

Date of Ruling: 11th December 2015

Mr. G. Suri for Claimant
Mr. W. Rano for 1st, 2nd, 3rd, 5th, 6th, 7th and 11th Defendants
Mr. D. Marahare for 4th Defendant
Mr. Kesaka for 8th Defendant
Mr. Upwe for 9th Defendant

RULING ON APPLICATION FOR INJUNCTION

Maina J:

Introduction

The Claimant, Asia Pacific Investment Development Limited filed an application with Certificate of Urgency seeking restraining orders against all the Respondents/Defendants over Parcel No. 289-005-1 in West Rennell.

In the substantive claim the Claimant says it holds a registered grant of profit and a registered sublease over Parcel No. 289-005-1 as at 19th June 2015 and seeks declaratory orders with lawful owner of the Parcel No. 289-005-1.

The Claimant seeks interlocutory orders to restrain all the Respondent/Defendants as follows:

1. An Order that the 1st – 11th Respondents be restrained forthwith from digging and removing earth, rocks, soil, gravel and from within the Applicant's/Claimant's mining tenement on land Parcel Number 298-005-1 in West Rennell.
   
2. An Order that the 1st – 11th Respondents, their servants, agents or invitees do vacate, within 48 hours of serve of this order, the Respondent's mining tenement on Parcel Number 298-005-1 in West Rennell.
   
3. An Order that the 1st – 11th Respondents be restrained forthwith from felling, harvesting, hauling or extracting logs pursuant to their respective log Felling Licences within the Applicant's/Claimant's mining tenement on land Parcel Number 298-005-1 in West Rennell.
   
4. An Order that the 1st – 11th Respondents be restrained forthwith from hauling, transporting or removing logs felled by them and are lying in the bush, piled at their log yards in the bush or along roadsides or at log ponds on the coast within the Applicant's/Claimant's tenement on land Parcel Number 298-005-1 in West Rennell.
   
5. An Order that the 1st – 11th Respondents be restrained from arranging any shipment of or making any sale of the logs harvested or extracted from within land Parcel Number 298-005-1 or from loading on any log ship, barge or sea craft such logs.
6. An order that the 1st – 11th Respondents do provide to the Applicant/Claimant an account each of the logs harvested and sold by each of them, stating the true species, quantity, FOB value and providing copies of Log Tally Sheets, Sales Contracts, Applications for Export Permit, Bill of Lading and duly completed Customs Export Forms.
   
7. An Order that any of 1st – 11th Respondent who has sold or exported logs after the Applicant/Claimant has obtained registered Sublease over land Parcel Number 298-005-1 do pay forthwith, by bank cheque, to the Applicant's/Claimant's Solicitor for banking into parties' joint Solicitors IBD Account to be opened with a commercial bank in Honiara.
   
8. Further and other orders as the Court deems meet.
   
9. Cost of ex parte application be in the cause; otherwise costs of any inter parte hearing be borne by the Respondents jointly and severally.
   

Mr Rano for his clients filed an application on 20th August 2015 to strike out the claim on grounds of frivolous and vexatious, shows no reasonable cause of action and abuse of process.

Brief Background

The Claimant signed Surface Access Agreement dated 10th April 2014 with the original customary landowners for accessing land for bauxite prospecting on West Rennell and holds mining lease over a tenement in West Rennell as from 5th September 2014 on registered land described as Parcel No. 289-005-1.

Claimant holds a registered Grant of Profit over Parcel No. 298-005-1 as at 18th June 2015 and holds a registered sublease over Parcel No. 289-005-1 as at 19th June 2015.

The 1st and 11th Defendants are logging and contracting companies and all undertaking logging activities on West Rennell on the portion of lands which have been converted into the registered land Parcel No. 289-005-1. The Commissioner of Forest had issued the log felling licences to them under Forest Timber Resources Utilization Act Cap (FTRU Act).

The licences were issued prior to the registered Grant of Profit and sublease to the Applicant/Claimant over Parcel No. 289-005-1 on 19th June 2015.

For the application, the counsel filed written submissions to the Court.

The Test for Interlocutory Injunction

First in this jurisdiction the law on interlocutory injunction is settled and the test is from the well known case of American Cyanmid Co (No 1) v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 and applied in number of cases in this jurisdiction and recently applied by Court of Appeal in Majoria v Jino (2009) SBCA 4: CA-CAC16 of 2008 (26 March 2009) as follows:

1. The applicant has established a serious issue to be tried,
   
2. Damages will not be an adequate remedy,
   
3. The balance of convenience lies in favour of granting the injunction in that it will do more good than harm and,
   
4. The applicant is and will be able to compensate the respondent for any loss which the order may cause him in the event that it is later adjudged that the injunction should not have been granted,
   
5. The circumstances where an order for damages would likely not be met.
   

To determine this or matters the Court is to consider the materials put before it and assess the not conflicting evidence, let alone the conflict of evidence of sworn statements as to the facts for detailed arguments at the trial.

The remedy is discretionary and the usual purpose of an interlocutory injunction is to preserve the status quo until the rights of the parties have been determined in the action.

Triable Issues

Mr Suri submits that triable issue relates to the lawful owner of the registered sublease in the Parcel No. 289-005-1 and now that fact that grant of profit as at 18th June 2015.

There is also a triable issue relates to the prospecting licences and surface access agreement issue to the Claimant over the Parcel No. 289-005-1.

But Mr. Rano for 1st, 2nd, 3rd, 5th, 6th, 7th and 11th Defendants said while it is conceded that the land had been converted to registered land and followed by sublease and a grant of profit that the mere fact of existence does not render the issue serious to be tried. The Defendant acquired timber rights and holds log felling licences at the land on Parcel No. 289-005-1 before the acquisition and sublease to the Claimant and the rights or interest is an overriding interest protected under Section 114 of Lands and Titles Act Cap 133 (LT Act). And Mr Rano further submits the Claimant knew that the Defendants have existing felling licences and timber rights along before it obtained the sublease.

Mr Rano's argument is supported by Mr. Marahare and Mr. Kesaka that their clients' holds valid log felling licences within the lands in Parcel No. 289-005-1 before the prior to the acquisition and sublease to the Claimant.

What is perfectly clear is that the Claimant and all the Defendants have their rights bestowed on them by the laws i.e.; Claimant under the LT Act and all the Defendants by the scheme of timber right under the FTRU Act. That to my view would not hold any conflict between the Claimant and Defendants as the latters' rights is subject to time limitation under the FTRU Act.

There are triable issues and with the existence of the rights or interests on both parties by the laws and; with the Defendant's rights before the conversion to registered land, grant of profit and sublease to the Claimant. This would render a consideration by the Court of the issue serious to be tried.

The Defendant's timber rights or interest were conferred on them by the operation of law and as noted earlier is the FTRU Act and the simple question to determine relates to that right is a profit. And if it is so, subsist and affect the same.

The Claimant's grant of profit was registered as at 18th June 2015 and sublease was registered as at 19th June 2015 and the Defendants conceded. But the contention is the Defendants interests as noted above were by the timber rights scheme or log felling licences which were issued to them under the FTRU Act and prior to the Claimant's registered grant of profit and sublease.

The FRTU Act provides for timber licence and acquisition of timber rights on customary land (Section 5(1)(c) and public land (Section 5(1)(b). With customary land the procedure for acquisition of timber rights is set out in Section 8 of the FRTU Act for purposes of identifying the persons lawfully entitled to grant timber rights. The Defendants went through the process under that Act and were issued with log felling licences.

The Defendant's felling licences authorities them to go into the land and harvest or fell logs for export subject to time limitation imposes under the licences.

And currently they are in occupation on those lands.

The Law

The law relates to overriding interests is in Section 114 of LTA:

Section 114

"The owner of a registered interest in land shall hold such interest subject to such of the following overriding interests as may, for the time being, subsist and affect the same, without their being noted on the register".

(a) rights of way, rights of water, easements and profits subsisting at the time of first registration of that interest under this Act; .....................................

(g) the rights of a person in actual occupation of the land or in receipt of the rents and profits thereof, save where enquiry is made of such person and the rights are not disclosed:.......................................

(i) rights acquired or in the process of being acquired by virtue of any law relating to the limitation of actions or by prescription:

Provided that the Registrar may direct the registration of any of the liabilities, rights and interests hereinbefore defined in such manner as he thinks fit".

One fact that is not disputed is the Defendant's rights subsist at the time of the first registration of the PE Parcel No. 289-005-1 in the name of the Commissioner of Lands on 29th May 2015 and when the sublease was registered in the name of the Claimant as at 19th June 2015.

The timber rights were acquired from the person duty determined and licences issued under the provisions of the FTRU Act and their occupations on the lands are confirmed by Solomon Maui in the sworn statement filed on 24th August 2015.

Section 114(1) of the LTA is being or the object is to protect a person in actual occupation of the land from having his rights lost in the first registration and or sublease. It provides for a profit subsisting at the time of first registration of the interests and Section 2(1) of the LTA defines a profit as:

"a profit' means a right to go on the land of another to take a particular substance from that land, whether the soil or the products of the soil and Includes the taking of wild animals".

Palmer J as he was then, in the case Isabel Timber Company Limited v Huhurangi Enterprises [2001] SBHC 115 held after adopting Black's Law Dictionary, sixth edition that:

"A grant of timber rights therefore comes under a grant of a profit and any Person wishing to acquire timber rights".

Beside the sworn statement of Solomon Maui filed on 24th August 2015 confirming the actual occupation, the Defendant's rights on the land were known and obvious to the Claimant as vested by the authority of FTRU ACT as noted above. It is no secret at all to the Claimant. If the Claimant was not aware at least they should enquire before the sublease of the land or enter into such transaction.

The Land has been converted to the registered Perpetual Estate (PE) and sublease to the Claimant and there are rights of the Defendant subsist as noted above. The rights of the Defendants are subject or may stay within the time limitation according to the condition of the log felling licences.

The Defendant's timber rights on the land is a profit as it subsisted at the time of first registration on 29th May 2015 and subleased to Claimant as at 19th June 2015. It is an overriding interests protected under the LT Act.

Balance of Convenience

With this, it is whether damages would be a sufficient remedy, if so an injunction ought not to be granted.

The factors relevant to the exercise of the discretion are, as in American Cyanmid Co (No 1) v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 and applied in the Greengrow (SI) Ltd v MSL Company and continuously applied in the numerous cases in this jurisdiction.

The cases highlights the following matters to be considered:

1. Damages will not often be a sufficient remedy if the wrongdoer is unlikely to be able to pay them.
   
2. Damages may also not be sufficient if the wrong is irreparable, outside the scope of pecuniary compensation or damage would be difficult to assess.
   
3. Also to consider whether more harm will be done by granting or refusing an injunction.
   

In this case, it is obvious the Defendants are logging companies and for damages they are capable to compensate or where damages are done that would be adequate remedy.

The Defendants by the licences issued them conducted activities on specific portions of land may cause the damages.

Strength of Parties Case

The case relates the rights conferred by laws to the parties and be to either party on legal arguments to the Court.

With the Claimant's application for interlocutory orders to restrain all the Defendants, I am not satisfied and therefore refuse and dismiss application.

ORDERS

Application dismissed.

THE COURT

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