Metro Team Ltd v Niva H Integrated Development Co [2017] SBHC 60; HCSI-CC 533 of 2016 (14 August 2017)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Faukona, PJ)

CIVIL CASE NO. 533 OF 2016

BETWEEN : METRO TEAM LTD First Claimant

AND : PATT LOE, HENRY NGUMI, LUXTON
JOVERE& OTHERS (Representing Kindu
Tribe/Kindu Council of Elders) Second Claimant

AND : NIVA H INTEGRATED DEVELOPMENT
COMPANY First Defendant

AND : RENOWN SURF & CARGO COMPANY
LIMITED Second Defendant

AND : STANLEY TOME, JOHN VETO, DAVID
MALANGA, WALTER EMU AND
ALFRED DIO Third Defendants

Date of Hearing : 13^th July 2017
Date of Ruling : 14^th August 2017

Mr W. Togomae for the Claimants (1) & (2)
Mr J. Taupongi for all the Defendants

RULING ON APPLICATION TO RELEASE OPERATIONAL COSTS

1. Faukona PJ: In the presence of both Counsels, the Court endorsed a regime of orders that proceeds from 5,000 cubic metres of loss extracted from iriripasapasa customary land be restraint and paid into a joint Solicitors trust account established for that purpose. This order is the most relevant one so far as this application is concerned.
   
2. Being as it may, the Defendant then filed through their Counsel on 22 February 2017, the application termed as “to set aside” or “vary”, the injunctive orders of 25^th May 2017.
   
3. Upon hearing of the application on 13^th July 2017, the tone of the submissions was relatively off the guide. It seems Counsels are keen to confine to release of the operational costs which is part and partial of the 60% apportioned to the logging contractor, in this case the Defendants. Though it is an alternative to setting aside, attract bulks of arguments about release of operational costs.
   
4. I think there is valid reason why Counsels focussed more on release of funds than setting aside. The rational, I guess is, if the court accepts the release of the operational cost, it is as good as setting aside the order restraining the funds.
   
5. Mr Taupongi’s arguments premise on the principles lay down in the High Court case of Mane v Evo ( ^[1]). The principles enunciated in that case can be outline as follows, “Firstly unless special circumstances is shown operational costs cannot be released. Secondly, that it has been a common practice in this country adopted by the courts that operational costs can be released. Thirdly, that where a report or income statement is provided, by way of certification, the court should release the operational costs”.
   
6. Mr Togomae for the Claimant argues otherwise, and urges the court to adopt the principles in the case of Kalena Timbers & Others V Bolopoe Corporation & Others (^[2]).
   
7. It would appear that the principles discussed in the case of Mane V Evo (^[3]) were further elaborated in the case of Kalena Timber v Bolopoe Corporation. The question whether which case was heard first in time is not an issue; the importance is that the Court of Appeal decision has a binding effect on the High Court.
   
8. In its decision the Court of Appeal rationalises the purpose and the importance of an injunction securing funds earn from export of logs into a joint trust account. That is basically to ensure there is some money available to meet damages. In other words, should there be no funds injected into a joint trust account or been released then there is no security available for any damages, revenues and the landowners.
   
9. Another point of contention is in relation to special circumstances which must be established before the release of operational costs. In the Court of Appeal case in Kalena Timbers the special circumstance was very obvious; that the Defendant did not possess any felling licence to fell and sell merchantable trees in the area of dispute. Therefore their operation was unlawful hence committing a criminal offence.
   
10. In this case there is no such special circumstance. However, that is not the only reason; there are others which must be shown. One of which is certification of expenses. Mr Taupongi had exhibited an accounting report of all operational expenses. Despite of that, the Court of Appeal stated at page 4, paragraph 23. “Those operational costs when claimed should be properly proved not from an accountant’s estimation, but by adducing of appropriate evidence. In some cases that may require expert evidence”.
    
11. In respect of the 60% the Court of Appeal stated that 25% is for custom duty which is clearly distinguished from 60% figure. The 25% is a statutory figure. The 60% is an assumed figure for operational costs. In other words, the 60% is not statutory based and that falls flat on the argument submitted by Mr Togomae.
    
12. It would appear the Court of Appeal had taken note that operational costs of 60% had routinely allowed in this jurisdiction where questions of validity of competing licences is called into question. May be in other situations are not applicable.
    
13. In this case the proper law is expounded in the Court of Appeal case; by law of precedent the High Court is bound by the decision of the Court of Appeal.
    
14. Generally, there is need to recognise that the purpose of imposing injunction is to reserve the funds so they are available to meet any award of damages made at trial.
    
15. I therefore dismiss the Defendants application to vary or to release operational costs.
    

ORDERS

1. Application to vary or release operational costs refused and dismissed.
   
2. Cost of this application is payable to the Claimants by the Defendants.
   

THE COURTS

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^[1] (2012) HC – 51, Civil Case No. 414 of 2012 (31 July 2013).
^[2] (2013) SICOA, CAC 03 of 2013 ( 8 November 2013)
^[3] Abid (1)