Poly Logging (SI) Ltd v R & M Logging Co Ltd [2016] SBHC 181; HCSI-CC 400 of 2016 (7 October 2016)

IN THE HIGH COURT
OF SOLOMON ISLANDS
Civil Jurisdiction

BETWEEN: POLY LOGGING (SI) LTD - Claimant

AND: R & M LOGGING CO LTD - 1^st Defendant

PETER AU & OTHERS - 2^nd Defendant

Date of Hearing: 7 October 2016

Mr. R. Tovosia for claimant
No appearance of defendants.

Application for interim injunction to protect logging operations

Brown J:
Extempore.
I had earlier refused ex parte orders and directed service of the application and supporting material. On the 21 September last, I was still not satisfied notice of the application had been given the defendants but today, after reading the sworn statement of Xu Lan I am satisfied proper service of the application and supporting documents has been made on the defendants and they are aware of the hearing of the application today.

By Claim (Category C) the claimants seek interim injunctive orders protecting themselves, their workmen and machinery from disruption while working in a concession area known as Abarafi customary land Ward 14 Malaita Province.
By a technology and marketing agreement dated 24 March 2016 (duly stamped) the concession was subject to logging by the claimant by agreement with the 1^st defendant company R&M Logging Company Ltd which held licence no A 19908. By that agreement the logging contractor accepted 60% of Freight On Board price of all logs exported and would be responsible for the marketing, exporting & sale of such logs. The balance 40% shall be paid the licensee’s bank account.

By supplementary agreement dated 23 April 22016 the land owners in custom over Abarafi customary land agreed with both R&M, and Poly Logging (SI) Ltd by warranty and assurance that the landowners “will not unreasonable interfere with or allow stoppage of logging operations in whatever manner or in terms of road blockage”.

Further, upon completion of the operation that contactor (the claimant) shall remove its machinery and other properties from the concession area provided settlement of all royalty monies due to the landowner under this agreement [had been made]. By clause 12, “landowners default”, the contractor without prejudice to other remedies may

1. sue for injunctive relief and specific performance and
2. claim damages
   

The agreement was signed on the landowners’ behalf by Obed Nare, Jack Afu, Timothy Sukulu, Mangona Clement, Samson Ofoi, David Jack Maesua and Stanley Toata.

David Jack Maesua is a director of the 1^st defendant and signed the supplementary agreement with his wife Rossie Maesua with the common seal of R&M.

The licence of the 1^st defendant named land areas of Abarafi, Baurara and Ngongore/Kwasa customary lands.
Development consent under the Environment Act was given on the 7 April and logging operations commenced.

By sworn statement of Lu Yuanfang, the Managing Director of the claimant company, disputation over logging has taken place. I set out paragraph’s 11 to 14 of the statement.

11. I further say that since the commencement of the logging operation on these land areas the applicant have experienced a lot of disputes and the landowners have disturbed the operation very much. The notable events commence on the 28^th August 2016 and are the particulars are as follows;
    1. There have been different landowning groups asking for compensation on taboo sites and are alleging trespasses on areas not within the concession areas. There was a group of landowners represented by brother’s Peter Au and John Au and are claiming owning Aiula land. Then there was another who claimed Burara land and had an argument with Peter and John Au’s tribe saying there was no Aiula land at all. As a result of this argument John and Peter Au have demanded the applicant to pay the amount of $ 20,000.00 after carrying knives and weapons to the office of the applicant and demanding these monies with threats to injure expatriate workers and to burn and damage machines and other properties owned by the applicant. At that time Peter Au had driven away a log truck of the applicant, but was later returned with the assistance of the police.
       
    2. Another group of landowners represented by Paul Au and an officer sgnt. Michael Ramosaea had made a claim over Likokwao land saying the applicant had made access road through their land. They have demanded also an amount of $ 20,000.00. A person by the name of Tony Kada’au is from the same tribe with Paul Au ad Michael Ramosaea, he had signed the access agreement and had received $ 10,000.00 but did not share it with the tribe members. While Tony is still claiming the balance of $ 10,000.00 Michael and Paul are making new claims to the applicant over the same access road.
       
    3. There is another tribe who is making claims over certain land areas. Their represented by Rofeta Solo and Hendry Masuri’i. We are unaware of these persons claim. On the 28^th August, Rofeta drove away with the applicants log truck and was kept by Masuri’i until the 3^rd of September 2016, when it was returned. This had disrupted the operation very much.
       
    4. That as a result of these threats and harassments the company had made two payment to the members of the second defendants. That now annexed to his my statement and marked as “PL7” is a true copy of the receipts.
       
12. That on the 8^th of September 2016 in the afternoon, the defendants Robert Sakumani and Thomas Fiugao have entered into the premises of the applicants at Ranadi and demanded that the applicant pay them the amount of $ 200,000.00 and if the applicant did not do that they will detain all the machines at the Maku camp. The applicant says that the two men mean what they say and are capable of doing it.
    
13. The first defendant had taken very little steps to resolve the dispute amongst the landowning groups. In fact they have been demanding more monies from the applicant in order to solve the disputes, but ended giving less from the amount they get from the applicant to resolve the disputes. The applicant had now lost confidence in the first defendant. In the past few weeks the first defendant had sent two letters to the applicant threatening not to resolve the disputes had the applicant did not give the required amount of the $ 50,000.00 and $ 100,000.00 respectively. That now annexed to his my sworn statement and marked “PL8” are the true copies of the said threatening letters of the first defendant.
    

14. That the applicant had now lost confident on the defendants named in this processing and decided to cease the operation at the said concession areas. The applicant is now in the process to haul, skid and transport the 2,500 m3 of logs in the bush go the campsite. The applicant had decided to haul, and load and export the said logs on a boat before it will pull out all machines on the said location and site. That this final operation will take a month or so to be completed.

I am satisfied the landowners have failed in their warranty and obligation under the supplementary agreement and the agreement has totally failed the claimant, and has been breached by the landowners and the marketing agreement has been breached by the inability of the licensee to resolve disputes [clause 6 of agreement] as detailed in the sworn statement, notwithstanding payment of moneys demanded.

The circumstances of disruptive acts satisfy me that the arbitration provision at clause 15 is of no possible use and the default in performance of the agreement gives rise to the right to sue for injunctive relief. On the sworn facts there is renunciation of both the t & m agreement and the supplementary agreement with landowners. The contracts were executory and performance of the contract on the part of the claimant has been shown to be impossible by the acts of the defendants. Since the claimants are entitled to maintenance of the contract until completion, the renunciation by the defendants entitles the claimants accept the discharge of their obligations under the contracts and sue for breach. On the facts there would seem to be little prospect of suing for breach but the rights to injunctive relief have been made out.
The application was originally made ex parte, refused on the 14 September when the Claim was listed for hearing on an interparty basis today.
By statement sworn by Xu Lan filed 5 October 2016 the administration manager of the claimant company, evidence of the service the claim and supporting material has been given to the 1^st & 2^nd defendants who may be taken to be aware of the hearing today.
Their non-appearance in the circumstances of the earlier evidence by the Managing Director rather shows their contempt towards these court proceeding since I had earlier adjourned the application, [for they had deigned not to accept service of the document,] to afford them time to consider their positon.

Nevertheless application has been heard today, Mr. Tovosia for the claimant having read the material on which I have relied. As well the rules relating to interlocutory orders have been satisfied. I make orders in term of paragraph’s 1, 2, 3, 4 & 5 of the claim filed 1^st September 2016. The defendant shall pay the claimant costs. Liberty to apply.

__________________
BROWN J