Asia Pacific Investment Development Ltd v Wordlink Resources Ltd [2016] SBHC 17; HCSI-CC 414 of 2015 (19 February 2016)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Faukona PJ)

Civil Case No. 414 of 2015

BETWEEN:

ASIA PACIFIC INVESTMENT DEVELOPMENT
LIMITED
First Claimant

AND:

BINTAN MINING (SI) LIMITED
Second Claimant

AND:

WORLDLINK RESOURCES LIMITED
First Defendant

AND:

ATTORNEY-GENERAL (Representing the Minister of Mines, Energy and Rural Electrification)
Second Defendant

Date of Hearing: 20th January 2016
Date of Ruling: 19th February 2016.

Mr. J. Ivanisivic and W. Togamae for the First and Second Claimants
Mr P. Afeau for the First Defendant
No one appears for the Second Defendant (excused and agreed to abide by any orders of the Court)

RULING ON APPLICATION FOR INTERIM INJUNCTION

Faukona PJ: A claim in category A was filed by the Claimants on 20th August 2015. Pivoted on the claim, the Claimants then filed this application seeking interim injunctive orders against the first Defendant its servants, contractors and agents.

2. In brief, apart from the restraining orders sought in the relief, the claimants are also seeking other orders which directly link to the activities done by the first Defendant which describe as illegal, and which appears if nothing is done, the first Defendant is likely to enrich itself unlawfully.

3. Other orders sought are purposely to restraint institutions whose functions link with the first Defendant's mining activities, not to participate or perform their designated functions to efficate smooth sales and export of mine products obtained unlawfully. At the same time seek order authorising Police Force to assist in enforcing the orders.

Background facts:

4. Asia Pacific Investment Development Limited (APID) was the holder of two (2) prospecting licenses No. PL: 4/08. The above prospecting license covered all the lands described as "bulighaimega", West Rennell, Renbel Province.

5. On 15th April 2014, APID applied for the grant of a mining lease for bauxite under the Mines and Minerals Act, in respect of the area described as "Rennell", Renbel Province. That area is the subject of two prospecting licences PL: 4/08 and included the land described as bulighaimega, West Rennell.

6. On 14th July 2014, APID and Bintan Mining (SI) Limited (BMSI) entered into a written contract with the Solomon Islands Government in respect of the propose grant of the mining lease the subject of APID application for Mining Lease.

7. On 22nd August 2014, World Link Resources (WLR) applied for the grant of a prospecting license for bauxite in respect of the land describe as "bulighaimega, West Rennel, Renbel Province.

8. The area the subject of WLR's application for the prospecting licence was wholly within the area subject of APID's prospecting licence A, and APIDs application for mining Lease.

9. On 5th September 2014, the Minister granted APID a Mining Lease No. ML.1/2014 under the Mines and Minerals Act in respect of the area described as "Rennell", Renbel Province.

10. By its terms and S.43 of Mines and Minerals Act (MMA) as amended by S.4, APID's Mining Lease conferred to it the exclusive rights for a term of 25 years from 5th September 2014 to carry out mining operations of those lands situated in Rennell in Renbel Province and dispose of and market the said minerals.

11. On 9th September 2014, 4 days after the grant of APIDS Mining Lease, the Minister granted Worldlink a prospecting licence No. PL: 05/14 under the Act in respect of the area described as bulighaimega, West Rennell, Renbel Province. That area is wholly within APID's Mining Lease.

12. Sometimes between 9th September 2014 and 11th March 2015, Worldlink applied for mining lease in respect of "bulighaimega " area. One 11th March 2015 the Minister granted mining lease No. ML: 03/2015 to Worldlink.

Court's power to grant injunction in Judicial Review Cases:

13. This Court inherits its powers from Rule 15.3.5 to grant interim injunction in judicial review cases. The rule states that a claim for an interim declaration or injunction may be made in proceedings for judicial review and the Court may grant an interim declaration or injunction if it considers that it would be just and convenient to do so having regards to (a) the nature of the matters (b) the nature of the persons and bodies against whom relief may be granted (c) all circumstances of the case.

14. When considering the above rule, the Court is to have regards to Rule 7.11 as well, including special consideration to a well-known test set down in the case of American Cyanamid Co. V Ethicon Ltd[1], that there is a serious question to be tried and the balance of convenience favours the grant of the injunction.

Serious questions to be tried:

15. The Claimants in their case set out a number of serious questions to be tried in the substantive claim for judicial review. They are all legal issues or issues arise out of noncompliance with the Mines and Minerals Act 1990 (Cap 42) and the Mines and Minerals Regulations 1996.

Serious question 1.

16. Section 20 (5) of the Mines and Minerals Act states that, "if there is pending before the Board an application for prospecting licence or mining lease in respect of the propose prospecting area, or if the proposed prospecting area is subject to an existing prospecting licence or mining lease, the Director shall refuse to accept an application from prospecting license at the time of submission".

17. Precisely, the current situation is that, there was a pre-existing prospecting licence PL: 04/08 (APIDS Prospecting License A) which covered the land described as bulighaimega land in West Renell. On 15th April 2014, APID applied for grant of mining lease for bauxite in respect of the area described as "Rennell" which comprised the two (2) prospecting licenses including the land described as bulighaimega land, West Rennell. Four (4) months later on 22nd August 2014, the first Defendant (Worldlink Resources Limited) applied for prospecting license for bauxite in respect of bulighaimega land, West Rennell. On 9th September, four days after grant of APIDS Mining lease, the Minister grant to Worldlink a prospecting licence PL: 05/14 under the Act.

18. The Claimants' submit for some reasons unknown, the Director did not refuse to grant the prospecting license to the first Defendant in compliance with s.20 (5) of the Act. That Licence was in respect of the same mineral on the same land as APIDS Prospecting License A and its application for Mining Lease. That is a real legal issue serious in nature which ought to be tested and tried at trial.

Serious Question 2.

19. Section 21 (1) of the Mines and Minerals Act state that , "Where the Board is of the opinion that an application for a prospecting licence, submitted in accordance with s.20 of the Act, is acceptable, the Minister shall inform the applicant in writing ("referred to as the "Letter of Intent)" of his intention to issue the prospecting licence subject to the applicant requiring surface access right".

20. The argument is that the first Defendant's application for prospecting licence was not submitted in accordance with s.20 of the Act, nor could the Board have reasonably considered that it was accepted; in respect of the same mineral and the same land which APID has a prospecting licence and application for mining lease. Should the Board have granted right, it would obviously conflict with rights granted to APID. As alleged, it appears that important check and balances to prevent conflict situation were overlooked or ignored or completely by-passed.

21. The issue raise is a serious questions, - whether the Board and the Minister had complied with the relevant provisions of the Act, in considering, before issuant of the purported prospecting licence to the first Defendant. It is a serious matter which has to be considered in the substantive case.

Serious Questions 3.

22. The issue raised here premises on Section 5 of the Mines and Minerals Regulation 1996. The provision ensures that the Board is satisfied that the application for prospecting licence is in order. Before the Letter of Intent is issued, the Director must transmit a copy of the application to the relevant Province of the area for which the application is made.

23. After considering the application, the Director within 30 days convenes a meeting in the villages in the area covered by the application.

24. At such meeting, the applicant and the Director or their representatives explain to the landowners in regards to:

(a) Propose prospecting, prospective mining operations, environmental implications and the relevant regulations.
(b) Application procedures and landowners consultations requirements;
(c) That holder of prospecting licence should not enter the land to carry out prospecting without prior consent of landowners;
(d) Right of landowners to receive fees, rentals in payment of access fees and compensation for damages.

25. Section 5 (4) states. "Any person claimed to be landowner of the area subject to application must within 30 days after the meetings, filed with the Minister his objection to grant of the licence".

26. Section 5 (6) provides that the Director shall not send a Letter of Intent to issue a prospecting licence unless 30 days has expired after such meeting.

27. The claimants are denying the Board did not form the opinion that the application for prospecting licence was in order. A Letter of Intent was issued to the first Defendant on 8th September 2015 by the Minister. On 23rd August, 2014, the first Defendant submitted its application for prospecting licence. It was 17 days before the Letter of Intent was issued. As it appears, the Director did not allow persons who may assert claims to be landowners of the area to appeal, 30 days after any meeting.

28. However, s. 21(4) (b) of the Mines & Minerals Act states that: on receipt of the Letter of Intent, the applicant in consultation with the Director, enter negotiations with landowners or group of persons having interest in the land to obtain surface access rights. S.8 of the Regulations states that only an applicant or holder of mineral right shall hold meetings with landowners for the purpose of negotiating or requiring surface access rights for prospecting unless the Director or representative is present. Given that letter of Intent was issued on 8th September 2014, and the first Defendant's prospecting Licence was issued on 9th September 2014, that is the very next day. Would that be possible, considering the requirements under the Act and Regulations. This is another very significant and serious question to be tried.

Serious Question 4.

29. S. 2(2) of the Mines and Minerals Act provide a person can explore for any mineral resources or carryout out prospecting in accordance with the Act or Regulations. If ...upon grant of the licence that a person is permitted to conduct prospecting, in direct expenditure, not less than the amount specified in the Licence, S.30 (2) of the Mines and Minerals Act, that only the holder of the prospecting licence who has made a commercial discovery may apply for a mining lease. The terms "discover' is defined in S.2 as meaning "a discovery of mineral deposit potentially capable of being mined commercially at a profit".

30. The claimants are saying the timeframe between the grantor to the first Defendant prospecting licence and mining lease being only 6 months. It is in imaginal having regard to location of Rennell Island, what would ordinarily be required in terms of work programme, expenditure, and in order to find and then assess any discovery made. Six months is too short a time to complete those requirements, yet this is what happened.

31. This is another serious question which have to be tested at trial.

Serious Question (5):

32. The next serious question raised by the Claimants is in terms of S.36 of Mines and Minerals Act, which states. "The Minister may grant a mining lease to an applicant where he is satisfied that:

"The proper mining area is not the same as or does not overlap an existing prospecting area or mining area so that the rights of the holder of an existing mining right in respect of such area will not prejudiced thereby".

33. From submissions, the area concern the first Defendant's mining lease application is within the area the subject of APID's Mining Lease. The mineral to be mined is the same, bauxite. There is no cooperation agreement between APID and the first Defendant.

34. In such circumstance, the Minister would have been satisfied that rights of APID would be prejudiced by any grant of mining lease to the first Defendant. This is another serious issue which have to be tried at trial.

35. The argument raised by Mr Afeau is that the Claimants do not have any surface access agreement with Mr Tema, the holder of the PE of the registered parcels of lands.

36. It is well understood that the first Defendant's application for prospecting licence was made after APID's application for prospecting licence and after APID's Prospecting Licence A had been issued. There is no question that the registered parcels of lands are located within APID's Licence. The question is whether the Director, the Board and the Minister would ignore that, and excise power by grant of prospecting Licence to Worldlink Resources Limited. It is an issue ought to be argued at trial. It would be interesting to note, if indeed there was no surface access agreement, in particular where the registered parcels can't have been treated differently from the rest of the customary lands which APID could have been done. As a result, APID was issued with the prospecting licence and subsequently mining lease.

37. There is a further submission that Mr Tema may not be the right person to convey any right, as he had relinquished that right to Mr Saueha and his sons, a scenario which was upheld in Civil Case No. 241 of 2015. Again that issue is one that ought to be considered in the light of the rest of the serious issues to be argued at trial.

38. Conclusively, it has been manifestly reveal that there are overwhelming serious issues identified which ought to be tested at trial. Important that the court must hear and record a finding. In particular where the issues are all legal in nature which a determination may shape the way forward in administering and compliance with the Mines and minerals Act and the Regulations.

Balance of Convenience

39. The two criteria to be considered in an application for injunctive orders are serious question to be tried and the balance of convenience which although may seem overlap. I am satisfied the serious issues raised by the Claimants are significant and must be tried. They are legal issues which contribute to the strength of the Claimant's case.

40. For the time being, the wrong seems to be eminent, and that ought to be prevented by issuant of the injunction orders.

41. I also note that certain restraining orders had been issued by this Court in Civil Case No. 634 of 2015, whereby the first Defendant, its servants, and contractors or agents are restrained from undertaking or causing to be undertaken any mining, or felling of trees or clearing of land on all parcels of land being the subject of this case.

43. And also are to remove all their plant, machinery and equipment from all the registered parcels of land until trial or earlier order.

44. Consequently, the above ought to be the status quo.

45. To secure any claim by the first Defendant for suffering any harm, both APID and BMSI have provided usual undertaking as to damage dated 20th August 2015 and is sufficient to address the issue.

46. I have also noted that the situation may be tense in Rennell Island and the first Defendant could have been at odd with the terms of the agreement which APID and BMSI had with Solomon Islands Government, and further at odd with the decision of the cases.

47. In the above premises, the balance of convenience strongly favours the granting of the interim injunction, and I do grant the injunction orders accordingly.
ORDERS:

(1) Order restraining first Defendant (Worldlink Resources Limited), its servants, contractors or agents:

(a) From undertaking or causing to be undertaken any "mining" within the meaning of the Mines & Minerals Act 1990 (Cap. 42) within the area identified in the plan attached and marked "Annexure A" to the Claim until further or earlier order;
(b) From trespassing with, obstructing, intimidating, harassing and or threatening APID, BMSI or any other respective servants, contractors or agents from conducting any "mining" within the meaning of the Mines and Minerals Act 1990 (Cap 42) within the area identified in the plan attached and marked "Annexure A" to the Claim until further or earlier order;
(c) From selling, transferring, shipping or otherwise dispose of any minerals mined from within the area identified in the plan attached and marked "Annexure A" to the Claim until further or earlier order;
(d) From loading, transporting, shipping or otherwise removing any minerals mined from within the area identified in the plan attached and marked "Annexure A" to the Claim or causing any such minerals to be loaded, transported, shipped, or otherwise removed from the area identified in the plan attached and marked "Annexure A" to the Claim until further or earlier order.

(2) Order that the first Defendant remove all plant, machinery and equipment from the area identified in the plan attached and marked "Annexure A" to the Claim within 14 days.

(3) An order restraining the first Defendant from re-delivering any plan, machinery and equipment to the area identified in the plan attached and marked "Annexure A" to the Claim until further or earlier order;

(4) An order restraining the Director and Mines and Minerals Board from granting or approving any application for permit, licences or authorities to the first Defendant, in relating to the area identified in the plan attached and marked "Annexure A" to the Claim until further or earlier order;

(5) Order, where any minerals extracted from the area identified in the plan attached and marked "Annexure A" to the Claim have been loaded onto any vessels which are still within the territorial waters of Solomon Islands, that the first Defendant immediately cause the said minerals to be unloaded from those vessels and to be stored in a safe and secure manner until further or earlier order;

(6) That the Comptroller of Customs and Excise and his officers are restrained from clearing any vessels referred to in sub-paragraph (4) above, or carrying out any clearance activity on board such vessels, until the Comptroller is satisfied that sub-paragraph (4) has been fully and completely complied with;

(7) That a penal notice be attached to orders (1) – (6) above.

(8) That the Royal Solomon Islands Police is authorised to assist in the enforcement of the above orders;

(9) That the first Defendant pays APID and BMSI costs on indemnity basis.

THE COURT.

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^[1] )1975) AC 396