Grace Logging Ltd v Attorney General [2018] SBHC 92; HCSI-CC 63 of 2018 (9 November 2018)

HIGH COURT OF SOLOMON ISLANDS

Case name:	Grace Logging limited v Attorney General
Citation:
Date of decision:	9 November 2018
Parties:	Grace Logging Limited v Attorney General, MP Holdings Limited
Date of hearing:	5 October 2018
Court file number(s):	CC 63 of 2018
Jurisdiction:	Civil
Place of delivery:
Judge(s):	Keniapisia; PJ
On appeal from:
Order:	The claim is dismissed with costs on standard basis
Representation:	Mr. C. Fakari’I for the Claimant Mr. D. Damilea for the First Defendant No Appearance for Second Defendant
Catchwords:
Words and phrases:
Legislation cited:	Civil Procedure Rule 2007,
Cases cited:

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 63 of 2018

GRACE LOGGING LIMITED
Claimant

v

ATTRONEY GENERAL
(Representing Commissioner of Forest)
First Defendant

MP HOLDINGS LIMITED
Second Defendant

Date of Hearing: 5 October 2018
Date of Ruling: 9 November 2018

Mr. C Fakarii for the Claimant
Mr. D. Damilea for the First Defendant
No Appearance for the Second Defendant

RULING ON CHATER 15 CONFERENCE

1. Being a judicial review claim, court conducted chapter 15 conference, pursuant to Rule 15.3.16. At the conference, court must be satisfied with four (4) matters in Rule 15.3.18 (a) (d), before claim can proceed to trial. The 4 matters in the order they appear in Rule 15.3.18 (a) (d) are: claimant has an arguable case; claimant is directly affected by the subject matter of the claim; there is no undue delay in bringing the claim and there is no other remedy that resolves the dispute fully and directly. Court must be satisfied with all 4 matters.
2. At hearing, Counsel Fakarii informed the court that he will discontinue claim against the 2^nd defendant. It was never intended that 2^nd defendant would be sued in this proceeding, counsel submitted. This came as a surprise to counsel Damilea; who insisted that 2^nd defendant should remain a party because, the landowners have come through 2^nd defendant (as licensee) to lay their hands on the Performance Bond (PB), of $250,000.00. Besides this concern, counsel Damilea made no substantive submissions on the 4 matters for scrutiny at this conference.

Arguable case and directly affected

3. It is the court’s view that claimant has no arguable case in relation to the PB. Under the license^[1] which Commissioner of Forest (COF) granted to 2^nd defendant (MP Holdings Limited – MPHL); only COF and MPHL are the two parties answerable, for the PB, not claimant, Grace Logging Limited (GLL). If claimant is to be involved or has an interest in the PB, then GLL must come via MPHL to sue the COF. For GLL and MPHL are two separate legal entities in law.
4. The COF apparently dealt with the PB, under the licensing agreement that, it has entered into with the licensee (MPHL). Look at the 2 letters that COF wrote to GLL^[2] and copied to MPHL on alleged breaches^[3]. The basis for COF’s action communicated to MPHL and GLL on alleged breaches is the Terms and Conditions of License No. A 101522. The Terms and Conditions on the PB are stipulated in Condition Number 8 (a) (c) and Condition Number 9 of MPHL License No. A. 101522. On reading those two Conditions, the COF may lay his hands on the PB for compensation, if the licensee (MPHL) has contravened any of the conditions of the license, the Act and subsidiary legislation made under the Act.
5. I gathered from the 2 letters that the COF had laid his hands on the PB for alleged breaches by MPHL and GLL of the licensing conditions. This is permissible under Condition Number 8 of the license where the PB is held as security for compensation for breaches by the licensee. Anything that touches on the Licensing Agreement can only be questioned by the COF and MPHL. Any other person that claims rights and obligations under the licensing agreement is a stranger. Not a privy to the said agreement. And hence not entitled to claim under the said agreement. Accordingly; I find that, GLL not being a privy to the said contract^[4] cannot claim for PB under the contract or agreement. Claimant may potentially do so, partnering with MPHL, but not on its own motion, as is the case here.
6. I take cognisance of Counsel Fakai’i’s submission that GLL was the one who sponsored MPHL expenses, in regards to MPHL Timber Rights Acquisition, including expenses connected to the license that MPHL has obtained from the COF. Such expenses included the payment of $250,000.00 PB that MPHL paid as a Term and Condition of the licensing agreement. Counsel Fakari’i submitted and is true that GLL paid the PB on behalf of MPHL. This is normal practice in the logging industry. And some kind of funding agreement will normally have to be entered into between GLL and MPHL. I have no evidence on this before me, but I take judicial notice of this prevalent practice in the logging industry. Whilst that may be the case, I come back to the licensing agreement between COF and MPHL. For this dispute emanated from the PB contained in Conditions Number 8 and 9 of the licensing agreement. The only 2 persons entitled to claim rights and obligations under the said licensing agreement is COF and MPHL not GLL. For GLL is not a privy to the said contract. It follows that there is no arguable case in relation to the PB, by GLL, acting on its own accord. That is also like saying GLL has no locus standi, to claim in relation to the PB, under the licensing agreement. Similarly GLL, on its own accord, is not directly affected by the subject matter of this dispute i.e. the PB. Claimant having failed on these 2 matters, I do not intend to cover undue delay and another remedy, suffice to say that there is no undue delay. And I can quickly say that another remedy is available in “Contract law” and or “Tort law”; to avail remedies to GLL in pursuing the recovery of the $250,000.00 PB it paid on behalf of MPHL. Claimant cannot do so via judicial review.
7. Accordingly; the claim is dismissed with costs on standard basis.

THE COURT
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JOHN A KENIAPISIA
PUISNE JUDGE

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^[1] Copy of license is wrongly exhibited at Exhibit SC 10 of sworn statement by Steven Chien filed 12/04/2018; as clarified by Counsel Fakari’i, in submissions. I refer in this judgment to this license as the “Licensing Agreement”.
^[2] Though written to GLL but was copied to MPHL. For purposes of PB, COF was speaking to MPHL on the alleged breaches.
^[3] See 2 letters in Exhibit SC 4 and SC 7 of sworn statement by Steven Chien filed 12/04/2018.
^[4] Contract is the Licensing Agreement.