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Mugihenua Investment Co. Ltd v Supreme Resources Company Ltd [2015] SBHC 73; HCSI-CC 211 of 2015 & CC 252 of 2015 (28 August 2015)

IN THE HIGH COURT OF SOLOMON ISLANDS
Faukona PJ:


Civil Case: No. 211 of 2015 and Civil Case. No. 252 of 2015


BETWEEN:


MUGIHENUA INVESTMENT CO. LTD
1st Claimant


AND:


NORMAN SA'OGHATOGHA, EVANS TUHAGENUGA AND RODNEY NASIU
2nd Claimants


AND:


SUPREME RESOURCES COMPANY LTD
1st Defendant


AND:


SOLOMON MAUI (Trading as Mugaba Timber Company)
2nd Defendant


AND:


ASIA PACIFIC INVESTMENT DEVELOPMENT LTD
3rd Defendant


AND:


ATTORNEY GENERAL (Representing the Commissioner of Forest)
4th Defendant


Date of Hearing: 1st August 2015
Date of Judgment 28th August 2015


Mr G Suri for Defendants 1 -3 in CC: 211 of 2015
And for Defendants 1 – 2 in CC. 252 of 2015


Mr W Rano for Claimants 1 and 2 in CC. 211 of 2015
AND for Claimants in CC. 252 of 2015


Ms Faneanganofo for Fourth Defendant in CC. 211 of 2015
And for Third Defendant in CC; 252 of 2015


RULING ON APPLICATION TO VARY OR SET ASIDE EX PARTE ORDERS


Faukona PJ: A dispute arose concerning kagua/magautu customary land in West Rennell, Rennell Island, Renbel Province. The Claimants are claiming they own the land and have logging concession right over it under their Felling Licence No. A101250.


2. The Defendants say they fell and extracted logs from within naone customary land, which share common boundary with kagua/magautu land, and say the Claimants have wrongly claim part of their land (boundary issue).


3. The third Defendant had applied and obtained a Prospecting Licence issued by the Board of Mines and Minerals pursuant to Section 20 of the Mines and Minerals Act (Cap, 42) over the area of land West Rennel as described and delineated on the map.


4. On 10th April 2014, a Mining Surface Agreement was executed. Clause 2.9 of the Agreement allows the third Defendant to remove logs before commencement of mining operations.


5. The third Defendant has a sub-lease of a registered mining tenement on West Rennel described as PN NO. 298-005-1. The registered land covers both kagua/magautu and naone customary lands. The mining lease was executed on 5th September, 2014. On 19th June, 2015 the third Defendant held the registered sub-lease over the parcel.


6. In about March or April 2015, the Claimants say the first Defendant entered into kagua/magautu concession area and constructed roads and felled trees. On the other hand, the Defendants argue that as a holder of valid Mining Lease, there is need to construct roads, clearance of forests in preparation for digging, extraction and stock piling of bauxite ores. There is no denial that logs been cut, hauled and stored at log pond.


7. On 9th May, the Commissioner of Forests issued a seizure notice, seizing all logs felled and extracted. On 15th May 2015, the second and third Defendants appealed to the Magistrates Court to claim the seized logs. On 2nd June, 2015, Second Class Magistrate, Lelapitu, exercised her powers under Sections 36 and 37 of the Forestry Resources and Timber utilisation Act (FRTUA) and entered judgment order in favour of the second and third Defendants, and granted the Second Defendant right to export the logs.


8. On 5th of June, 2015, a Category A claim was lodged. On the same date ex parte orders were granted restraining the Defendants not to carry out any logging activities on kagua/magutu Concession Area.


9. On 10th June 2015, the parties before the Magistrates Court made a Consent Order to vary the Magistrates Orders of 2nd June, 2015. The Consent Order was endorsed and signed by the Solicitor General on behalf of the Attorney-General, and was perfected by Magistrate Lelapitu. The effect of the Consent Orders is that the third Defendant was allowed to immediately export the seized logs and to be loaded on board MV Morning Swan No.1, Voyage 1502. It was also ordered that the proceeds of sale be deposited in Central Bank of Solomon Islands.


10. Also noted is a seizure notice issued to the first and second Claimants on 19th May, 2015 which was never appealed. Again on 15th July, 2015 another seizure notice was issued to the Fist Claimant to show because why it's Log Felling Licence No. A101250 should not be cancelled since the land covered by the licence has been registered.


11. On 24th June 2015, the first Defendant commenced loading the felled logs. On the same date and ex parte order was granted by this Court restraining the first and the third Defendants and stay of all Orders of the Magistrates Court.


12. The first and third Defendants now come to Court by way of further amended application to set aside or vary the High Court Orders of 5th June 2015, at the same time filed an amended application to set aside or vary the ex parte Orders of 24th June, 2015.


The Issue.


13. The major issue is whether this Court should set aside the ex parte orders granted and perfected by itself on 5th June, 2015 and 24th June, 2015.


Right to market logs felled.


14. A significate question to ask is who has the right to market the logs that had already been felled by the Defendants? Is it the Claimant, the Defendants or the Commissioner of Forests? The scenario depicted in this case is one of the integrated rights with a mass complexity pointed to the roots of how the parties became known and accepted as investors on West Rennell lands. Complexities in the sense that the dispute premise on the issue of logging operation of which processes are catered for under the Forest Resources and Timber Utilisation Act (FRTU), and mining of deposit ore of which processes are stipulated under the Mines and Minerals Act (MMA). Where two developments under different Acts integrated on one land, often the issues intertwined and become ferociously complicated.


15. As a matter of fact it cannot be denied that the Commissioner of Forests did not issue any Felling Licence or Special Permit to the third Defendant though formal attempts to secure one were made. However, there was a grant of profit by PE holders on the registered tenement made on 18th June, 2015.


16. With that introductory brief as a background, the question is are the Claimants secured a better right to market the logs?


Standing of the 1st Claimant.


17. The Counsel advocate for the Defendants argues that the first Claimant has no locus standi. The facts that support that inclination are that, on 1st June 2015, the First Claimant as an incorporated company was removed from company register. Therefore its existence as a legal entity is no longer on record when it lodged this claim on 5th June 2015; therefore annulled and of no existence.


18. That course of argument was rebutted by the Counsel advocated for the Claimants, that the first Claimant was restored by virtue of Sections 151 (1) and 152 (2) of the Companies Act 2009, therefore it is as if it was never removed, hence the first Claimant has standing.


19. I have read the relevant provisions of the Companies Act 2009 which Mr Rano has referred me to. It is an acceptable fact that the first Claimant was removed from the Companies register on 1st June, 2015 and the reason for removal was failure to file 2014 Annual Return. It is also conceded that the first Claimant had been restored on 27th July, 2015.


20. From 1st of June 2015 to 27th July 2015, what is the legal status and rights of the first Claimant during the period of removal? Section 151 (2) of the Companies Act states, that a company that is restored to the register is deemed to have continued in existence as if it had not been removed from the register. Section 152(1) of the Companies Act provides that during the period of removal, the property of the Company was vested in the Crown pursuant to Section 146 of the Companies Act. Upon restoration, the property is vested back on the first Claimant as if the first Claimant had not been removed from the register. It may also connote that upon restoration, the first Claimant's properties and functions were revived back. They were not, in my view, permanently removed or revoked but temporary vestment until such time when the first Claimant has fulfilled the requirements. The properties refer to here are properties define by Section 146(2) of the Companies Act 2009. The Act does not specifically states what are other classification of properties, is affected by any of such removal. However, it only indicates leasehold property and bluntly states other properties; it merely makes reference to inclusion which is broad in meaning but narrow in description.


21. Perceivably, the root of argument is not so much on classification of property (that is an issue for the Second Claimant), but the status of the first Claimant during the period of removal from the register. I take comfort in reading the case of T.W. Transport Ltd –v- Maru[1]. In that case, the National Court of PNG considered by adopting the decision of the Supreme Court in Ace Guard Dog Security Services Ltd –v- Lindsay Lailai (2004) SC 757, where it was held amongst others, that the appellant was not incorporated as a company, has no legal standing and is therefore incompetent to institute an appeal.


22. The Court also refer to NSW Supreme Court Case of Unlimited Insurance C. Ltd (in tig) –v- Lang (1937)- 35-SR (NSW) where the Court stated:


"........a non-existent person cannot sue. In this case of a natural person, the English Courts would decline to entertain an action in his name........"


23. In this case, I consider the facts and submissions before me. The first Claimant was a joint party to the second Claimant. At that time the claim was filed (5th June 2015), the first Claimant was non-existence or ceased to exist, hence its properties were vested on the Crown, so there is no person before the Court. Consequently, the first Claimant has no standing at all, a very simple issue. The authorities are very clear and simple about it.


Standing of the Second (2nd) Claimant


24. The core argument under this sub-heading premise on the fact, given the registration of all the lands in West Rennel. It now has new landowners, PE trustees, Commissioner of Lands (as leaseholder) and the third Defendant (Sub-leasee). Consequently, kagua/magautu concession is now being subsumed under the registered mining tenement and that rights of grantors (Second Claimants) have withered and fallen. As such, the law on indefeasibility in Section 110 of the Land and Titles Act come into play, that rights of legal owner cannot be defeated.


25. Mr Rano argues that mining lease does not operate to extinguish timber rights created by Statute. The Forest Resources and Timber Utilisation Act (FRTUA) and Mines and Minerals Act (MMA) do not bind the Crown but operate side by side – See section 8 of the Interpretation and General Provisions Act.


26. Here we have a situation where the application of the FRTUA is measured against the MMA. I am conscious not to wonder astray from the subject; the right of second Claimant to come to Court.


27. The second Claimant appears to be a silent bystander when the first Claimant was removed from the Companies registry. It may seem as a novel that the logging investment would now face away. I say this because it is argued that the Standard Logging Agreement(SLA) is not binding on the registered owners; the whole entire processes from the beginning to execution of SLA, and issuant of a Felling Licence and logging operation would now ceased because new landowners are taking over the land, leaving the Second Claimants as grantors in owe and tatter. If their whole entire tribe agreed and consented to a new development, they would not have come to this Court.


28. Their presence in Court as party upholds their belief and traditional values and interest to their land. What manner of development that may come ought to be considered in the frame work of a society, and their traditional rights to claim land ownership?


29. Development on land changes and transcends the natural feature of customary lands but none will take away the rights. The question ought to be posed is, are the people who claim the land the rightful owners?


30. It brings us to a point that kagua/magautu is one of the customary lands situated on West Rennel, a fact un-denied. There is also no dispute that the land is owned by the Second Claimants. Their claim is that the Defendants had entered their lands and felled trees and extract logs, an allegation denied. Is that not an Issue? In my respectable view, that is a case to be tried. In fact, it culminates a dispute in the context of boundary. It is clear from evidence that parties do not consent to boundaries shown on their maps. That issue ought to be tried in a proper forum established by statute.


31. This boils down to the very fact that whether the Defendants had felled trees from kagua/magautu customary land or naone customary land. There is no dispute that the third Defendant has no Felling Licence or special permit issued for the purposes applied for. In both cases, there was nothing. Can the Defendants rely on the grant of profit granted on 18th June, 2015? That grant of profit was issued later. Extraction and felling of trees were done well before the grant of profit was granted.


32. It is argued that since the first Claimant does not exist in law, the Felling Licence is ineffective, void and cannot be utilised. I have narrated in s. 146 (2) of the Companies Act on paragraph 20 above as to what is a property. I do not think a felling licence or a standard logging agreement is a property described under the Section. Therefore whether it was ceased or void, because such instruments have not attain status as prescribed by the Section. If there is a seizure or void for any purposes, then it would be improper and out of sense and human reasoning that those be automatically revive on the date of restoration. There ought to be processes in place, or a reapplication commencing with the entire FRTU process again. That can't be because s.151 (2) clearly stated "where a company is restored, is deemed to have continued in existence as if it had not been removed".


33. The Second Claimants are determined as grantors of timber rights. Not only that, but as landowners, whether assertive or otherwise, the fact that s.146 (2) does not disqualify property to include a felling licence or a standard logging agreement; and that is a live issue of ownership of land and boundary, thereby qualified the second Claimants to come to Court and seek remedy; they have the standing or locus standi to do so.


Interests of the Defendants


34. The Defendants rely on Clause 2.7 of the Mining Surface Agreement dated 10th April 2014, the Mining Lease signed on 5th September 2014 and Section 43 (1) and (9) of the Mines and Minerals Act (Cap.42) and the request and sub-lease on 19th June, 2015, entitled them to clear the forest and remove logs before commencement of mining operations. However, they cannot rely on grant of profit dated 18th June, 2015, which was granted before the registration of sub-lease on 19th June, 2015 - See paragraph 4.2.2 (e) and (f) of Mr Suri's written submission. Not just for that reasons, but the fundamental is that the grant of profit was granted after the Defendants had felled and extracted logs for sale and export.


35. It is not a contentious issue that registration was done to grant efficacy to the mining lease issued by the Minister. The effect of the mining lease is specific to minerals specified in the lease – See s. 43 (2) of Mines and Minerals (Amendment) Act No. 6 of 1996. In my view, mining does not operate to automatically extinguish timber rights created by statute.


36. Despite being in possession of Mining Surface Agreement, mining lease, registered sub-lease and registered grant of profit, they do not affect rights to the timbers. This is manifested by a letter from Director of Mines to Commissioner of Forest dated 2nd April, 2015 to grant the third Defendant felling licence. Again a letter from the third Defendant to the Minister of Forests dated 8th April, 2015 to issue to itself a special permit under s.4 (1) (c) of FRTUA.


37. The third Defendant knew to fell trees and extract logs for sale and export, it needed a Felling Licence. Two attempts were made to obtain one but were not successful. The third attempt was much later when grant of profit was granted to it by the Commissioner of Lands. Grant of profit means a right to go onto the land of another to take particular substance, in this case, trees. A grant of timber rights comes under a grant of profit; any person wishing to acquire timber rights would have to obtain a profit under Lands and Titles Act before applying for a timber licence – see Isabel Timber Company Ltd v Huhurangi Enterprises.[2]


38. In all those three occasions neither a Felling Licence nor a Special Permit was issued, so the Third Defendant has no right at all to fell and extract logs. Therefore the action taken by the first and third Defendants in felling trees and extraction of logs for sale and export was unlawful.


39. Another interesting point to note is in regards to the registration of the land in the name of the landowners, then the Commissioner of Lands and then sub-leased to the third Defendant. Is it the best the third Defendant can acquire?


40. The process whereby which a mining lease be acquired is set out in Part V of the Mines and Minerals Act (Cap. 42). S.30 (1) states the Minister has a discretionary power to issue mining lease for the carrying out of mining operations in Solomon Islands. Only the holder of a prospecting licence who has made a commercial discovery may apply for a Mining lease s.30 (2). Before making an application, consultation must be made with the Director requesting the Minister to cause negotiations. The agenda to be discussed during negotiations related to terms and conditions of the Mining Lease, sharing of production, revenues, and profits or equity capital – s.30 (3). Any Agreement reached after negotiations are reduced to writing s.30 (4).


41. By Section 31(1)(2) provides an application be made in writing to the Director. Upon receipt of the application, the Board is of the opinion is acceptable, the Minister will inform the applicant of his intention to issue the Mining Lease pending the acquisition of Surface Access rights, s.32 (1). Where the applicant has acquired surface access right, the Minister may grant a mining lease subject to Section 36 of the Act.


42. S.33 (1) provides where Surface Access Agreement cannot be reached or concluded at the negotiation stage, the Minister in consultation with the Minister of Lands & Housing, required the Commissioner of Lands to exercise the powers conferred by Division 2 of Part V of the Land and Titles Act. Simply that the Commissioner of Lands will administer the compulsory acquisition process to acquire the land. This is when registration of the land comes into Play. By S.33 (5), on completion of purchase, lease or compulsory acquisition, the Commissioner of Lands then transfers the interest to holder of a prospecting licence.


43. Suffice to say that there are anomalies in the registration of the land. I am not sitting as an appellate court or in case of judicial review, but the fact the Defendant have raised and relying on the registration of land as one of the fundamental rights, granted to it inter alia, to sell and export logs that had been cleared for mining purposes. Generally, the law is clear; where parties agreed on Surface Access Agreement, it need not necessary to go through acquisition proceedings again.


44. Gather from the tone of the Defendants' submissions, it reflects an unusual approach. Armed with material evidence such as mining lease, holder of land sub-lease and grant of profit meant that any investment in terms of logging or otherwise established before acquiring those legal rights as aforementioned, should cease operation forthwith. That in my view foreshadowed a risky effort which will hatch into a chaotic situation. I noted the Claimants had been issued with seizure notice, may be others as well. To bulldoze their rights, careless of any other investment which had been continuously and legally operating, is not a kind of approach which upholds peace and good business co-existence. That attitude is definitely will bring doubt to unacceptable result. Not only that, but financial consequences as well. Those investors may have the right to claim for loss of business and expected earnings, damages, loss of business interest and profits and many more. It is prudent that the authorities, the current Government and the Defendants aware of the consequences that may likely be contemplated. It may cost fortune if no precaution is taken.


Jurisdiction to grant injunction:


45. It may appear the path to invoke the inherent jurisdiction of the High Court to grant injunctive relief is twofold. One is expressed by Gadly Simbe case[3] and the other by the well-known American Cyanamid case[4]. Mr Suri is concerned with the principle best laid down by the Simbe case where the High Court has jurisdiction to issue injunctive orders in aid of the lower Courts deal with customary issue of land ownership which the High Court has no jurisdiction to entertain. The second route is a test set down by the American Cyanamid case from which perhaps Rule 7.11 derived its sources. It states; for the Court to grant the orders it has to be satisfied there is serious question to be tried and that the applicant is likely to succeed, damages is not an adequate remedy and the balance of convenience favours the making of the order. There is no doubt some amalgamation or commonality requirements down the process but the opening door is quite segregated. In such application a claim filed will normally foot the grant of the injunctive orders.


46. It ought to be noted that it is not the intention of this Court to usurp the function of the Magistrate Court delegated by statute stipulated in Sections 33, 36, and 37 of FRTUA, dealing with appeals emanates from seizure notice served on the Defendants.


47. As a result the ex-parte injunctive order made by this Court on 5th June 2015 thereof interfered with the orders of the Magistrates Court, consequently creating a situation of conflict. In a normal perceptive situation, on order of a Court, higher in the hierarchy of courts has precedent in relation to the same issue concerning same parties. In this case the issue before the Magistrates Court is (1) to determine who has the interest in the properties seized and (2) direct the sales of the properties.


48. There was no determination as to ownership of the properties as required by the S.36 of the FRTUA. The orders, as it may, are in the nature of direction for sale, fulfilling the second limb or requirement under S.36. The first requirement has never been complied with.


49. The manner in which the procedures were conducted appeared sceptical; whether the Court was hearing an ex-parted application or an application for default judgment. In any event, the Court proceeded and gave judgment order. The court must have been satisfied on the grounds why the Attorney-General failed to appear in Court, thus the orders were made against it. Those reasons were not entrenched in the judgment order.


50. Emerge is another point in relation to the jurisdiction of Magistrate Lelapitu. It is public notice she is a 2nd Class Magistrate. The FRTUA states an appeal be lodged and heard by the Magistrate Court. It does not specifically state which class of Magistrate. However, there is no secret the value of equipment and machineries together with felled logs should determine which class of Magistrate should preside. They do not value thousands but millions of dollars. Perhaps lawmakers should have prudently confer jurisdiction upon the High Court which has unlimited jurisdiction rather than the Magistrates Court.


51. I am not determining an appeal or a claim for judicial review as I have said. The fact is, those issues were raised in submissions therefore must attract commentaries. I understand there is an appeal against the Magistrates orders pending in the High Court. Perhaps at that relevant time those issues be litigated and determined in full.


52. The most and significant reason why, in my opinion, there is no fundamental error made causing a split of jurisdiction, is because the sworn statement that supports the application and other relevant documents were filed on 28th May 2015, four days before Magistrate Lelapitu granted the orders on 2nd June 2015. Only the claim was filed on 5th June 2015. Notably the orders made by the Magistrates Court were varied by a consent order on 8th June 2015.


53. Logically, Mr Apaniai who filed the application would not know, nor foresee the nature and effect of the orders of Magistrate Lelapitu. Realistically the orders of the High Court of 5th June 2015 were made independently of its own based on the evidence in support. There was no conflict or fundamental error which may cause any jurisdictional split.


54. This brings us to a point whether the Claimants or their Solicitor failed to disclose necessary facts at the application, whether those facts are in favour of their case or detrimental to as a requirement by law ought to be disclosed. In the case of Gazokesa v Oria[5] Justice Apaniai said in paragraph 11;


"It is trite law when making an application for injunctions, in particular ex-parte applications, the applicant must make full disclosure to the Court. Full disclosure means disclosing all relevant facts that support the application as well as all relevant facts which are unfavourable to the application. Facts are relevant where there is a clear nexus or connection between those facts and the relief sought in the application"


Paragraph 14;


"Where an injunction is granted in the absence of full disclosure, or because the Court has been misled by what was said, or was not said, the Court will, as a general rule, discharge the injunction. The Court will do so because, by suppression of facts or by misleading statements, the Court was presented with a case, which is different from what actually exist.


55. Counsel for the Defendants has pointed out certain facts which are not disclosed which may be detrimental to the Claimants case, and may not warrant the grant of the ex-parte orders. Facts related to removal and felling licence has been profoundly addressed in consequence of determination of the first Defendant's which it has no standing. Other facts related to Surface Access Agreement and Mining Lease are public knowledge and undisputable. The rest of the facts asserted as not being disclosed are in the nature of registration, PE holder, and grant of profit which comes under the mirror which reflected the process applied to acquire registration is questionable. Apparently it is subject to question, what is the purpose for land registration when the Surface Access Agreement had been agreed upon and had been executed. The Mines and Minerals Act (Cap. 42) S.33 talks about compulsory acquisition of Part V Division 2 of the Lands and Titles Act which commences by a declaration and is different from acquisition process stipulated by Part V Division 1 of the Act which is an acquisition by private treaty. Compulsory acquisition can only take place where there is no prospect concluded on a basis acceptable by the parties.


56. The question is not because those facts were not disclosed and so the Court has no option but to grant the orders. The orders were granted on the basis that third Defendant has no felling licence at all and the second Claimants are the landowners, though assertive, affirm by being identified as grantors and affirmed when the appeals to CLAC were dismissed. At the moment they have the better rights. And so they come to the aid of Court to protect their rights to their land from being encroached by a sub-lease holder who did not possessed a Felling licence at all. Even if those facts were not disclosed it was not detrimental to grant the ex-parte orders. The issue is one of customary boundary between naone land and kagua/magautu land. The third Defendant may possess a registered mining lease, a sub-lease and a grant of profit over all the lands within West Rennell but it will not resolve the customary lands and the boundaries between the customary landowners. It may probably use the land registration and sub-lease as a shield but that will not resolve any risk arising.


Has the High Court jurisdiction to stay Magistrates Court orders:


57. The legal meaning of stay is to post phone or halting of a proceeding, judgment or order. Stay of mandate is suppression of lower Court's order execution, imposed by a higher Court - Blackstone Law Dictionary.


58. On this principle of stay, a useful guideline is propounded in the case of Harbour City Real Estate Pty V Cargill[6], which states,


"It is sufficient that the applicant for stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour,... and that will be fair to all parties... The Court has discretion whether or not to grant the stay, if so, as to the terms that would be fair. In exercise of its discretion the Court will weigh considerations such as balance of convenience and competing rights of the parties; Attorney-General V Emerson (1889) 24 QBO 56. Where there is risk that if a stay is granted, the assets of the applicant will be disposed of, the Court may, refuse to grant stay".


59. To affirm the jurisdiction of the High Court to grant stay both the Rules and the Constitution conferred on the High Court the inherent jurisdiction to grant. In the case of shell Company (Pacific Islands) Ltd v Morries[7] the Appeal Court held,


"I start with the undisputed position that the Courts do have an unfettered discretion to grant a stay or not to do so - see Attorney-General V Emersion (1890) 24 OBD 56.


60. The orders which the Defendant's sought to set aside or vary are the orders made by this Curt on 24th June 2015. Order 3 specifically points out that Consent Orders of 10th June 2015 issued by the Magistrates Court in Civil Case No. 127 of 2015 be stayed.


61. The argument pose by the Defendants is that the legal purpose for seeking staying order is to aid a pending appeal. There is no appeal on foot or a claim for judicial review on file therefore the stay order was granted in vacuum.


62. The move by the first Claimant to seek ex-parte orders on 24th June 2015 was a direct response against the Consent Orders perfected on 10th June 2015 by the Magistrates Court. The Second Claimant who was a party in Civil Case no. 211 of 2015 was not a party in the application on 24th June 2015. It was an application by the first Claimant alone and by itself. The question is has the High Court jurisdiction to stay orders of the Magistrates Court in a circumstance where no appeal is pending or a claim for judicial review is pending.


63. Rule 16.20 is one of the rules under the heading appellate jurisdiction. This particular rule provides that an appeal from the Magistrates Court or the High Court cannot operate as a stay of the decision appealed, unless the Court orders, or a law or rules are provided for. It is no doubt that stay of decision or order must be one which is made in connection with an appeal lodged. This also confirms with Rule 17.78 where Court can grant stay of judgment for duration of appeal if an appeal is filed. In this case there was no appeal lodged against the Consent Orders by the Claimant. I noted the Attorney-General had filed notice of appeal on 30th June 2015 against the Orders of the Magistrates Court on 2nd June 2015. There was no application for stay by the Attorney-General and so there was no order as to stay of the decision. The first Claimant cannot appeal because it was not a party in the Magistrates Court case. At the same time it has no locus standi because it was still under the shadow of removal from the register of the Company House. I am convinced by Mr. Suri's submission that the Ex-parte Orders of 24th June 2015 was granted in vacuum.


64. Again in the case of Harbour City Real Estate Pty V Cargill the Court said;


"Even though a judge will generally not be required to speculate about the appellants prospect of success, it is well established that a stay will not be granted in the absence of arguable grounds of appal, or if the appeal is not bona fide.


65. It is clear a stay of order or decision cannot be granted unless there are arguable grounds in the appeal or the appeal is not a bona fide one. In another authority it added that a stay will not be granted if there is no prospect of success in the appeal- Australian Workers union V Pilkington (Aust) Ltd.


66. The case authorities and the rule makes it clear a stay of decision or order can only be granted where there is an appeal on foot or judicial review case been filed. In this case the Claimant who obtained the Ex-parte Orders in its favour had not appeal the Consent Orders or filed a claim for judicial review in the High Court. The problem is because of its non-existence. Therefore, I must rule quashing all the orders dated 24th June 2015.


Jurisdiction of High Court to suspend export permit issued by Commissioner of Forests.


67. The Counsel advocate for the Defendants argues that the suspension of the export permit issued by the Commissioner of Forest on 11th June 2015 is restraining a decision or an act made by the Commissioner. The counsel refer to section 18 (2) of the Crown Proceedings Act (Cap.8). The intent of the section is to bar the Court from granting injunction or making an order to give any relief against the Crown.


68. I do not think by making an order will give relief against the Crown. In fact the Crown stands no benefit out of it when we look at the business transaction in a broader sense; of course it may reflect some benefits. A relief normally granted by the Court to or against a party is no different from being associated to the Commissioner in this case. I think that is what the section is all about.


69. When we are serious about the law, then circumstances does require application of the law must be in uniformity. In this case an appeal was made against the Commissioner of Forest decision in terms of seizure notice. The Orders of the Magistrates Court on 2nd June 2015 was against that decision to siege. The Crown was not available for reasons not explained. In all manner of civil case the Crown as a party and by making an order against it, is eligible for some relief due against it. Order 3 (injunctive relief) directing the Attorney-General or authorised representative to endorse the market price certificate. It was that order that led to recommending the export. If there was a failure on the part of Attorney-General then of counsel a claim of contempt is a possible course of action.


70. The Consent Orders of 10th June 2015 did not subsidise or abrogate the orders of 2nd June 2015. In fact they were labelled as variation by way of inclusion to the orders of 2nd June. Orders 2 of 2nd June are the same as Order 1 (a) of the Consent Orders. Hence, if the Attorney-General consented to Order 1 (a), there is no difference from being accepting Order 2 of 2nd June which is the same.


71. I am attempting to distinguish the two situations where S.18 (2) can apply equivocally with one likely to incur relief against the Crown than the other. Furthermore those Orders were made after the submissions in both cases. Because the Attorney-General had consented to the second regime does not make it better, may be on the ground of concession for consenting. Technically the circumstance is slightly different because the purported hearing in the Magistrates Court is an appeal provided by law. But the effect which may give relief against the Crown is the prohibition part which the Court is banned not to do. Therefore the effect of Order 4 of the Orders of 24th June suspending the export permit directly affected the Defendants not the Attorney-General at all, so relief against the Crown is quite remote other than the orders of 2nd June by the Magistrate Court.


Jurisdiction of High Court to set aside consent order:


72. Setting aside orders or judgment is part and partial of the jurisdiction of the High Court. However, the question is in what circumstances would the Court exercises its powers to set aside consent orders.


73. Rules 17.50 to 17.53 refer to consent orders. Rules 17.54 to 17.58 admonish setting aside orders. Though there is no specific utterance of setting aside consent orders, the fact those set of rules sequentially follow one another, gives a real prospect of consent orders. I have no doubt in my mind they do because R9.52 to 9.56 govern setting aside default judgment. Besides that, the rule is clear that all interlocutory orders in Chapter 7 can be set aside by these rules.


74. The relevant rules advocate, the Court may set aside an order anytime if it was made in the absence of party, obtained by fraud or if the order is for an injunction. The High Court orders of 24th November 2015 were purposely to set aside the Consent Orders of 10th June 2015. It is fundamentally clear the Consent Orders are in the nature of injunctions. Can this Court set aside the Consent orders in the circumstance of this case? The Court may be utilising its inherent powers. However, the case of Wialu v Kaltakum,[8] The National Court of PNG said;


"Moreover, it is settled law that the consent orders or judgments should not be set aside easily by the Court which made them because of the manner in which the consent orders on judgments were ordered and entered in the first place and that the Court before which such applications are brought must always exercise caution, see Morsden; Paul Torato V Sir Tei Abal (1997) PNGLR 403; Coecon Ltd V The National Fisheries Authority of Papua New Guinea (2002) N2.182.


75. In another case of PNG International Hotels Pty Ltd V The Registrar of Land and Titles (2007) N3207, Davani J observed that the rules on setting aside consent orders do not apply in situations where a party has not consented to them and is detrimentally affected by them. Her Honour stated at paragraph 59,


Whilst there are clear difficulties for parties who have consented to orders applying to set aside those orders they consented to. I find those rules on consent orders cannot be applicable to applications to set aside orders where the application is made by an entity that did not consent to them but who is detrimentally affected by these orders"


76. The law in PNG can be taken as a persuasive authority; the facts may have some similarity, but the rules are perhaps on different footings. The Solomon Islands Civil Procedures rules seem to be vague and without good clarity at all. But the reasoning by Her Lordship in the above case has some legal bearings. It would be improper for someone who had consented to an order applied to set aside, unless the orders were obtained by fraud or error on the face of the record. Secondly it would be out of common logic for someone who is not a party and give consent, to apply to set aside. In other words a person or an entity that is not a party and does not give consent, cannot apply to set aside a consent order though it may be adversely affected. There may be an error on the face of the record but it's up to the Attorney-General to apply to set aside.


77. In this case the Claimant is not a party; hence its consent is not necessarily required. I am cautious and take precaution that the Claimant before applied to set aside has no standing to do so. At the same time its removal from the register was yet to be revived. Therefore in the circumstance of this case such order would not have been granted.


78. It boils down to a legal analysis that two orders, one from the Magistrates Court and the other from the High Court can cumulatively applied without subsidisation. In such circumstance which order will prevail. I have noted in my previous paragraph that the two orders may stand side by side. Each is given independently premises on law. To conclude, the best option I would decide is to accept the High Court Order of 5th June 2015 as a prevalent order that must stand the test.


79. My reason is that the third Defendant was not issued with a felling timber licence at all. Secondly that the decision of the Magistrates Court was partly done. There was no decision concerning the ownership of the logs, equipment and machineries. It points out to the jurisdiction, whether a 2nd Class Magistrate has power to determine a claim of ownership of those properties with values in millions of dollars. Thirdly the acquisition process is subject to controversy, whether the Mines and Minerals Act had been complied with or not. If not, is it a new invented process that affects the sub-lease and grant of profit simultaneously? With that, the High Court Orders must supersede as an order from a superior Court than the Magistrates Court. Fourthly, as I do mention earlier, that the Second Claimants come to Court as persons whose rights been recognized by the Customary Land Appeal Court, with claim for trespass and damages. Not forgetting the issue is one of boundary between naone land and kagua/maguatu land own by the second Claimants.


Right to export:


80. There are arguments as to who is qualified by right in law to export the logs already being loaded on a ship. The Counsel advocate for the Defendant relies on acceptable practice which is recognised by law in the case of Middle Island Pty Ltd and Others V Kalena Timber Company Ltd and Others[9]. The case stated that the party that had expended money to fell and extract logs should be allowed or given the right to market the logs but on terms and conditions.


81. I noted on paragraph (2) of the case that the question of whether an appropriate licence was held. It was for that reason an injunction was granted preventing the export.


82. A similar situation arose in the case of Poa V Attorney-General[10]. In fact this case was considered by the Court of Appeal in the Middle Island case. I noted in Poa case the felling of the logs, or at least some of the logs by the Respondent were done prior to the granting of the special permit. In imparting his decision His Lordship Apaniai J (as he was then) gave reasons for his judgment, that the Respondents are entitled to export the logs. One of his reasons and I quote from paragraph 18 which stated:


"Furthermore, it is the Respondents who had incurred the costs of the felling of the logs. These logs or at least some of them, have been felled as the result of that permit and exemption and it would be more unfair to the Respondents if the Minister were to be allowed to deny them the right to export the logs. The reason that some of the logs may have been illegally harvested without a permit (words expressed are mine). Finally, arrangements have already been made by the Respondents with the log vessel (MV Pacific Banghe) for the logs to be exported. The vessel is now in the country and within the vicinity of the moka land".


83. From those case sceneries, it is apparent that despite unlawful harvest of trees for export, without any felling licence, special permit and exemption, or by way of grant of profit, so long as someone has expended money on those illegal activities, and the ship is now in the Country for ex-part of the consignment he is entitled to export the logs.


84. In contrast, is the case of Hugo K'Clay and Richard Moka V Attorney-General[11]. In this case the appellants were harvesting beach-de-mer in contravention of Regulation13 (A) of the Fisheries Act, 1998. They were found and therefore surrendered 35,553.9 tons of beach-de-mer to Police and Ministry of Fisheries. Later those beach-de-mers were bought at a price below commercial value, so they filed a claim in the High Court. Among other things, they claim the Defendants by unlawful means conspired to cause economic harm to them and that the Defendants by deceit cause them to suffer financial loss. That claim was struck out on the grounds of it being frivolous and vexatious and disclosed no reasonable cause of action. The appellant therefore appealed to the Court of Appeal. The test is that the Court will not strike out a claim except in clearest cases. Where there is an arguable point at issue, the case should be allowed to proceed to trial.


85. The striking out order was based on the fundamental issue, whether the Court should lend its aid to the Claimants who have admitted harvesting beach-de-mer in contravention with Regulation 13 A. the Courts have finally accepted that no Court will lend its aid to a man who founded his action upon illegal act, later expressed as, anything done in contravention of the provisions of any written law cannot made the subject matter of an action.


86. Here we have two situations of overt actions contravening certain provisions of the written law, with different results obtained. The two factual situations emerged from two sources of Act. Therefore applicability and approaches were different as well. Breaches of regulation under the Fisheries Act require seizure and investigation for a criminal offence. Breach of Forest Resources and Timber Utilisation Act commenced with seizure notice, then an appeal to the Magistrates Court. The Court after hearing such appeal is entitled to make orders.


87. Another contrast expounded in C'Klay and Moka case is, the Court at that time was actually dealing with the substantive issue of the claim which was tested by an application to strike out. In this case and two other cases quoted above deals with interlocutory orders in terms of injunction. Perhaps, because of these differences in the nature of legal litigation that renders approaches and expected results different. In this case I'd go along with the decision that relates to the Forest Resources and Timber Utilisation Act as an authority. To deviate and condone with the fisheries case is an error in approach and in law. In determination, the first and third Defendants are entitled to export the logs. Expert permit had been issued and that can be rejuvenated as soon as possible.


Estoppel by conduct/representation.


88. The principle is defined by a statement governing estapol by conduct or representation made by Spencer-Brown in Hopgood v Brown[12] That statement was adopted by Palmer J (as he was then) in the case of Isabel Timber Company Ltd V Huhurangi enterprises[13]. The statement said, [1]


"... where one person (the representor) has made a representation to another person (representee) in words or by acts as conduct or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive) and with the result of inducing the representee on the faith of such representation to alter his position to his detriment the representor in any litigation which may after words between him and the representee, is estopped, as against the representee, from making. Or attempting to establish by evidence, any averment substantially or variance with his former representation, if the representee at the proper time, and in the proper manner, objects thereto".


89. There are five ingredients quoted by Palmer J on page 9 paragraph 3 of his ruling. The most important and relevant elements are representation of fact as contrast with more expression of intention, and the test that in the circumstances a reasonable men would regard himself as invited to act in a particular way.


90. Words may have been said by the Minister of Forest, an influential person vested with the power in making directions and decisions. That the Defendants would extract and fell logs whist applications for felling licence or special permit were being considered. The Defendants thereby relied on such representation and act by commencing felling and extraction of logs to their detrimental.


91. From the authorities I am able to glean two significant limitation areas. One that the doctrine of estoppel cannot be used as a sword, only a shield. It also cannot be used to found an action. The second aspect is that an estoppel cannot be relied on if the result of giving effect to it would be something that is prohibited by law.


92. The minister would have conveyed some representation to the Defendants; it is a question of fact. In this case the Defendants are not utilising the principle to litigate a claim against the Crown or the Minister. The principle is only a rule of evidence a step in the progress towards relief that the Minster or Crown is estopped from denying the truth of something which he had said. In that prospect it needed not to venture further. Therefore it cannot be said to be shield or sward, a non-factor.


93. The second limitation is quite important to this case. If this Court would give effect to the representation and conduct, then it would appear the Court is condoning a wrong. Furthermore, a representation relied upon to ground the estoppel must be clear and not left for argument. See Legione v Hateley[14]. It must be clear before it can found estoppel by conduct (Law v Bouverie)[15]. It is well recognized by concluding a man to allege the truth, must be certain to every intent, and not to taken by argument or inference, Cokes Littleton 352 (b).


94. The existing of fact in this case was utterance of words which induced the Defendants to belief and had acted accordingly. Unfortunately, there is no evidence from the Minster in response to the allegation. Should the Minister deny the occasioned assumption, then the Defendants cannot rely on estoppel as a ground. Secondly, if the Court accepted the occasioned assumption as verily true, then the conduct by the Defendant in felling and extraction of logs without a licence is a wrong which this Court cannot condoned. Therefore the Defendants cannot rely on the principle of estoppel by conduct/representation.


95. On another point, the third Defendant had been involved in logging operations in Solomon Islands for years. It knew very well without being taught that felling and exporting of logs required a felling licence. To be induced by words, if ever be, was a bluff which he knew was inconsistent to law, hence by permitting itself to adhere to, is a self-inflicted detriment which by virtue of the authorities cannot foot a claim on the doctrine. The notice of good conscience must be a force to drive good estoppel. I must conclude the Defendants cannot rely on the doctrine of estoppel by conduct/representation.


Summary:


96. In summary the following findings of the Court impinged on the orders the Court make hereunder.


(a). The third Defendant was never issued with a felling licence or special permit though applications were filed for consideration. Any felling or extraction of logs for sale either from kagu/magautu or any land within west Rennel for time being is illegal, let alone for the purpose of clearance before mining operation.


(b). That the first Claimant has no standing by virtue of its removal from the company house register on 1st June 2015 when the claim was filed on 5th June 2015 to foot the ex-parte orders of the same date, the orders were granted to a company which is no longer in existence.


(c). In any event the second Claimant survives the ordeal. Take away the felling licence and the standard logging agreement, their claim to Kagua/magautu customary land is a life and serious issue. It becomes imminent that the common boundary between kagua/magautu customary land and naone customary land is the major issue yet to be resolved to ascertain whether there is trespass by the Defendants or not.


(d). The land registration is quite sceptical; its purpose is not identified. The Mines and Mineral Act is a simple piece of legislation which stipulates the processes. Where there is no Surface Access Agreement was concluded, then there is need for compulsory acquisition to be adopted commenced by a declaration from the relevant Minister. This is not the same as the common acquisition processes which is quite familiar to many as an acquisition process by private treaty. This may probably affect the sublease and the grant of profit.


(e). The jurisdiction of the 2nd Class Magistrate to determine an appeal provided for under the FRTUA is a mind bogging. Apart from directing sales of stockpile logs, the Magistrate is bound to determine Claims as to ownership of the machines, equipment and logs seized which valued millions of dollars. In such a case the Chief Magistrate has full control and management as a Chief administrator of the Magisterial Services. He should decide and delegate responsibility to a Magistrate with an appropriate jurisdiction to hear such a case. If the Chief Magistrate was not acceding to such, it would seem the Magistrate was used for some convenience reasons.


(f). With the status of the first Claimant which appear alone in this case seeking orders to oust the consent regime of 10th June 2015, its standing has been disqualified hence orders as to stay, set aside were not granted though this Court has jurisdiction, it must exercise its discretion amidst the circumstances of this case.


g. After assessment of both law and facts what remains is a remanent of two set of regimes, one granted by the High Court on 5th June 2015 and the other granted by the Magistrates Court on 2nd June 2015 with an additional by way of Consent Orders on 10th June 2015. In such circumstance where conflict arises on the same subject matter the High Court orders must take precedence over the Magistrates Court orders. The orders were independently granted and valid, hence, the High Court orders must achieve supremacy over the other. That status is achieved and valued on the premises of which Court is higher in the hierarchy of system of Courts in Solomon Islands.


97. On the question of balance of convenience and maintaining the status quo the scale tilt in favour of the second Claimants as far as injunctive orders are concerned but a fair order will prevail.


98. There are too much at stake in terms of irregularities. Parties must be given the opportunity to have their claims heard in the rightful forum where possible. I have taken comfort from the case of Taraoa Development Association V Manelusi[16]. At trial of the case the High Court was satisfied that there were too much at stake, as a consequence, a new regime was structured and blessed as orders of the Court. In fairness I will apply the same approach in this case considering the factual situation may in some manner similar to the above case. The new regime orders will supersede all other orders related to the parties including permanent orders of 9th June 2015.


Orders.


1. That the first, second and third Defendants and their servants and agents are hereby, restrained from entering and/or remaining on kagua/magautu concession area until trial or further order of the Court.


2. That the first, second and third Defendants, their servants and agents are hereby, restrained from felling and extraction of logs within kagua/magautu land until and/or further order of the Court.


3. That the first, second and third Defendants and their servants and agents remove all their logging machines from the said kagua/magautu concession area forthwith.


4. An Order that the first and second Claimants their servants, agents and invitees be restrained from entering naone road, hankaka, sabesabea, magamaitonga and matahenua including teumupaka and sanibaga lands.


5. An order that first and second Claimants, their servants, agents and invitees be restrained from entering and interfering with the Defendants activities over the said and above customary lands.


6. An order that the first and second Claimants, their servants, agents and invitees be restraint form interfering with the Defendants employees and their machines, equipment and plant whilst carrying out their activities over the said customary lands.


7. The export permit authority issued by the Commissioner of Forest to the third Defendant on 9th June 2015 is rejuvenated as proper and necessary in the circumstance of this case.


8. An order that third Defendant is allowed to immediately export all seized logs already loaded on board the vessel MV MORNING SWAN NO. 1 VOYAGE 1502.


9. That all proceeds of the sale, less 25% Solomon Islands Government export tax, be paid into a joint trust account in the names of the Solicitors of the parties.


10. That the third Defendant to furnish to the Claimants with all the necessary export documents inclusive of all logs list, letter of credit (LC), bill of landing (BOL) and Commercial invoice.


11. Cost in the cause.


The Court.

[1] (2012) PGNC 279; N4934 (7 December 1012).
[2] (2001) SBHC 115; HC-CC 19 of 2001 (14 June 2001 )
[3] CA – CCA No.8 of 1997 (unreported)
[4] [1975] UKHL 1; (1975) AC 396 at 406-8
[5] (2014 SBHC 17; HCSI-CC 379 of 2011 (3 April 2014)
[6] (2008) FLA 1382; (9 September 2008)
[7] (2003) SACA 18; CA-CAC 5 of 2003 (18 July 2003)
[8] (2012) PGNC 89; NA 4709 (29 June 2012)
[9] CAC Case No. 31 of 2012.
[10] (2011) SBHC 110
[11] Court of Appeal Civil Case No. 9 of 2014.
[12] (1995) EWCA Civ 7; (1995) 1 A11ER 550 at P. 559.
[13] (2001) SBHC 115; HC – CC 109 of 2001 (14 June 2001)

[14] (1983) HCA 11; (1983) 152 CLR 406
[15] (1891) 3 CL 82m 106
[16] (2006) SBHC 129; HCSI-CC 609 of 2005 (12 October 2007).

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