Asia Pacific Investment Development Ltd v Attorney General (Representing Rennell and Bellona Province) [2015] SBHC 95; HCSI-CC 483 of 2015 (6 November 2015)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Faukona PJ)

CIVIL CASE NO. 483 OF 2015

BETWEEN:

ASIA PACIFIC INVESTMENT DEVELOPMENT LIMITED
First Claimant

AND:

BINTAN MINING SI LIMITED (20141465)
Second Claimant

AND:

ATTORNEY-GENERAL (Representing the Rennell and Bellona Province)
First Defendant

AND:

ATTORNEY-GENERAL (Representing the Police Commander)
Second Defendant

Date of Hearing: 1st October 2015
Date of Ruling: 6th November 2015

Mr J. Ivanisevic and Ms Willy for the First and Second Claimants.
Mr S. Banuve for the First and Second Defendants.

RULING ON APPLICATION FOR INTERIM ORDERS

Faukona PJ: This is an application by the Claimants filed on 24th September 2015 for interim injunctive orders restraining the Defendants. There are four restraining orders sought as relief including costs.

2. The first Claimant is a holder of a Mining Lease No. ML: 1/2014, which was issued on 5th September 2014. That has never been disputed. By grant of the Mining Lease, conferred exclusive right to the first Claimant for a term of twenty five (25) years to carry out mining operations on pieces or parcels of lands on West Rennell, Rennell Island, for the purposes of mining bauxite and dispose of and market the same mineral.

3. Further exclusive rights to mine are set out in Section 43 (a)-(f) of the Mines and Minerals Act (Cap.42). Sub-section (f) sum up such exclusive rights to engage in all such other activities as may be reasonably necessary for carrying out mining operations.

4. The first Claimant has engaged the second Claimant as its contractor to undertake mining activities. It is a separate Company that does the work; the first Claimant does not undertake any mining activities on Rennell Island.

5. Both Claimants held the requisite business licenses issued by the first Defendant under the Rennell and Bellona Business Licence Ordinance- Schedule 1, 1995 (Old Ordinance) to conduct their respective businesses.

6. The first and Second Defendants are represented by the Attorney-General whose Office is established under Section 42 of the Constitution, and the principle legal advisor to the Government and its agencies.

7. The Attorney-General is representing Renbel Provincial Assembly established under Section 7 of the Provincial Government Act, and the Commissioner of Police which is a public office established under Section 43 of the Constitution.

8. By an extraordinary gazette published as supplement to the gazette dated 4th March 2015, the Renbel Province introduced the Rennell and Bellona Province Business Ordinance 2014 (New Ordinance).

9. In early April 2015, both Claimants applied and were granted renewals of their respective business licenses under the New Ordinance.

10. On 9th September 2015, the Deputy Provincial Secretary issued a letter addressed to both Claimants of which paragraph 7 stated, the Executive Government of Rennell and Bellona Province in its deliberations, voted to cancel your license for failure to provide requested documents in compliance to section 7 of the New Ordinance, including failure to pay in full all required payments to the Provincial Government of Rennel and Bellona Province.

11. Despite the cancellation of first Claimant's business license on 10th September 2015, it applied for further renewal of its business license.

The issues:

12. There are a number of issues enumerated. They are term as serious questions to be tried. The first question is whether the first or second Claimants have valid business licenses pursuant to the New Ordinance of Renebel Province. Associated to this core issue, are other issues as well. For instance whether the cancellation by the first Claimant's business license was authorised by the Provincial Executive and was done on the basis of law, and whether the Claimants have indeed not complied with section 7 of the new Ordinance as read with section 10 of the said Ordinance. And whether the advice by the Attorney-General was done on proper legal basis. Those issues are serious and ought to be tested in court.

The revocation of business license.

13. The letter the Defendants rely on as revoking the business license of the first Claimant was written on 9th September 2015, by the Deputy Provincial Secretary. The letter was addressed to both Claimants. When referring to whose license was cancelled, the title of the letter made reference to the first Claimant only. I have no hesitation to draw conclusion that the cancellation was only made to the business license owned by the first Claimant. By paragraph 7 of the cancellation letter, it referred to one license (in singular). That affirms to me the business license of the second Claimant in still valid and the cancellation does not extend to it or its renewal business license.

14. The question is, if there was indeed a valid revocation of the first Claimant's license, will it still continue to operate its business on Rennell island without any interruption by Police on advice by the Attorney-General? The effect of this is viewed on the basis that the second Claimant is not operating a business of its own, or does any mining of its own though it may have valid Mining Lease. The un-denial fact is that the second Claimant was contracted by the first Claimant to indulge and do Mining operations on behalf for the first Claimant. Therefore it is prudent and seems to be the case that without a business license for the first Claimant meant it does not own any business up and running, operate or manage in Rennell and Bellona Province. Thus placed the second Claimant in an awkward position because the terms of the contract executed by both Claimants bind both of them. It was the first Claimant under the business license conveys task upon the second claimant to involve in the business of mining within Renbel Province, which license now asserted as being revoked. Therefore, there is nothing left, no job; no function is conveyed to the second Claimant to do. The second Claimant therefore becomes defunct and a by stander. To allow the second Claimant to operate as a separate entity unaffected; could only be possible if it operates alone. In this case the second Claimant is contracted by the first claimant to do mining operation. It is precariously answerable to the first Claimant and should not in my opinion permitted to operate independently of its own without the first Claimant.

15. Be as it may, that should envisage a conclusion of the legal implications and the effect of the New Ordinance. However, it does not stop there. Section 10 of the New Ordinance states;

"An applicant is deemed to hold a licence from the date their application is received by the Provincial Secretary or Authorised Officer"

16. Legal doors could have been closed upon the Claimants. The only option left is to mount a challenge if they wish to do business in Rennell and Bellona Province. That contention is no longer necessary because Section 10 of the new Ordinance has provided an exit from the cancellation. It is a deeming provision which extent to the second Claimant that they hold business licenses from 10th September 2015 when further renewal applications were received by each of the Provincial Secretary, the Treasurer, the Premier and the Deputy Provincial Secretary. There is no evidence to rebut that further renewal application has been received by rightful authorities.

17. I noted there is contention, that when S.7 and S.10 of New Business Ordinance are read in collaboration, it maintains the cancellation effective. That is another issue, but suffices to say, that could be possible, if the Province had determined by cancelling the second application for further renewal. The Renbel Province is probably sitting on that application right now.

Advice by the Attorney-General:

18. What transpires from the events is not so much an attempt to seek supremacy, that the mining rights take precedence over Business License rights. I have well narrated the effects of such cancellation in paragraphs 13 and 14 above; that should conclude and end the matter. The case for the Claimants premised heavily on S.10 of New Provincial Ordinance.

19. It is perhaps this section which the Attorney-General is not aware of. I noted the function of that office under s.42 (1) of the Constitutions, as a Principle Legal Advisor to the Government and its agencies. I also noted the new Police Act 2013 (No 2 of 2013) in particular Part 2, section 6 which states,

"Police officers shall act independently, subject to the command of the Commissioner, when carrying out or performing any duty authorised under this Act and shall not act in accordance with the directions, command or control of any person who is not authorised under this or any other Act or the Constitution to direct, command or control the actions of a Police Officer"

20. Premise on that section, the advice by the Attorney-General dated 22nd September to Assistant Commissioner of Police (Operations) which is a reply to ACP"s e-mail of equal date is exceptional, one which is authorised by law.

21. Paragraph 4 of the advice (part thereof) can be paraphrased as thus;

"APID has a valid mining lease under the MMA, if it does not have a business license from the Province, its mining operations in Renbel Province is illegal under the Province's Business Licence Ordinance. Where both or one of these laws is not complied with, APID has no right to carry out any mining activity in Renbel Province and it cannot seek the assistance of the Courts to make an order restraining anyone from interfering with its mining activities".

The Attorney-General continued and in the two last sentences of his advice which reads;

"The Police are therefore entitled to prevent a breach of the law and to arrest, or assist in arresting; anyone who behaves to be breaking the laws. They also have the authority to stop APID from carrying out any further logging activity in carrying out those activities, including preventing of loading of vessels engaged to ship the minerals overseas"

22. The memorandum of advice for further renewal of the application by the first Claimant (and to the extent necessary, second Claimant) and the consequential effect of S.10 deeming an application to held further renewal license. Based on that section both Claimants deem to hold business licenses and should be able to conduct their businesses. Any breach of the ordinance is a regulatory offence of the state and fine, if proven guilty.

23. S.10 of the new Ordinance as a deeming or saving provision could have been an oversight, not to say the least, by the Attorney-General when conveying those advises. There is no basis upon which Police may arrest or detain any workers engaged in the conduct of the business. With the advice, Police had subsequently encircled the operations and continuously monitor the activities to prevent by intimidation and threat to arrest the loading of the vessels engage to ship the mined minerals overseas. Had S.10 as deeming provision been aware of, things would not have escalated this far and advice would have been different.

24. Police might have been acted upon the commands or directions of the Commissioner of Police, however, nothing is ever hinted nor a piece of evidence reflected in this Court. Actions taken by Police correspondingly reveal in paragraph 10, 16 and 24 of sworn statement of Mr Tang filed on 28th September 2015, based on advice from the Attorney-General. The Provincial Police Commander, Mr Bagala, at a meeting with the Claimants' representatives Mr Hu and Mr Tino informed them that he was acting on the advice of Attorney-General to stop mining activities, including digging and not to load or transport bauxite. It is a risk doing so because s.79 (b) of the Mines and Minerals Act makes it an offence to unlawfully interfere with or obstruct a holder of a mining lease or their servants or agents in the exercise of any right acquired under the Act.

25. To conclude, if there is any threat, interference, obstruction, harassment or intimidation by Police, that should be relieved. S.10 of the new Business Ordinance need to be read and understand in full. It's an ordinance which the Province was delegated with power to formulate and must be adhered to its provisions.

This application:

26. Application for interim injunctive orders is provided for by Rules 7.9 of SI Courts Civil procedure Rules 2007 of which the Court has power to make such orders according to Rule 7.3 and Rule 7.38. Pursuant to Rule 7.11, the Court may make the order if it is satisfied that the applicant has serious question to be tried and that the balance of convenience favours the making of the orders.

27. In the contemporary state of modern law, the adoption of tests expounded in the case of American Cyanamid Co V Ethicon Ltd[1], is perhaps a source from which R7.11 and Rule 7.38 derived. In any event the case of Talasasa V Attorney-General and Ors[2], His Lordship Muria CJ outline the relevant principles in determining whether an interlocutory injunction ought to be granted or not. That principle had been adopted and applied in many instances in this country, for instance the case of Beti & Ors V Allardyce Lumber Company and Ors[3].

Serious issue to be tried.

28. It has been shown that there are serious issue to be tried, see paragraph 12 above. And I am satisfied that test has been established.

Balance of convenience

29. Having being satisfied on the test that there are serious issues to be heard at trial, the next issue to consider is the balance of convenience. In this case the Defendants are two organs of the state and are represented by the Attorney-General. On the issue of adequacy of damages, I am in doubt the Claimants would be adequately compensated in damages for loss in various headings if interim injunctions are denied and they win their case at the end of the day. In such scenario I will move to the second requirement.

30. In considering the second requirement, there is undertaking filed by the Claimants that they will abide by any order for damages the court may make, if the interim injunctive orders are issued. No doubt the Defendants would adequately be compensated for any loss they may suffer. On the balance what would the Defendant loss should injunction is issued? I don't know it may be nothing, it's not shown in evidence.. In this instance, I would rather incline to grant the interim injunction orders. Grant of injunction orders is viewed as relevant on the balance and considering the application and meaning of S.10 of the new Provincial Business Ordinance. The purpose to grant is to maintain the status quo until the Province determines further application for renewal of the business licenses of the first Claimant or until the Court determines the serious triable issues.

31. Another point to consider is that the extent of loss and damages by the Claimants are substantial. To enumerate, the most common losses are demurrage fees, financial penalties with their customers, reputational damages for failing to deliver shipment, dismissing of workers, cease to provide payments and services to landowners and cease paying of royalties and government taxes. Those are common losses one expects in mining industries. They are not new. Most important are the relevant laws and ordinances which must be complied with in carrying out the business of mining.

32. In this case the balance of convenience is in favour of the Claimants and I must grant the injunctive orders prayed for.

Orders:

1. The first and second Defendants, their servants, contractors or agents are restrained from interfering with, obstructing, intimidating harassing and or threatening the first and second Claimants, or any of their respective servants, contractors or agents from conducting any mining activities (within the meaning of the Mines and Minerals Act 1990) within the area the subject of the mining lease number ML: 1/2014 until further earlier orders.

2. The Rennell and Bellona Provincial Police Commander and anyone at his direction are restrained from carrying out the advice of the Attorney-General dated 22nd September to Selwyn Rotu, Acting Commissioner of Police (Operations).

3. The Rennell and Bellona Provincial Police Commander and any officers are restrained from arresting or otherwise detaining the agents, officers or employees of the first and second Claimants pursuant to the advice of the Attorney-General.

4. Cost against the Defendants and the Attorney-General on standard basis.

The Court.

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^[1] (1975) AC 396.
^[2] (1995) HC-SI 4-95 at page 4.
^[3] (1991) CC. 45 -91