Leo v Mas Solo Investment Ltd [2019] SBHC 12; HCSI-CC 179 of 2018 (15 February 2019)

HIGH COURT OF SOLOMON ISLANDS

Case name:	Heta Leo v Mas Solo Investment Ltd
Citation:
Date of decision:	15 February 2019
Parties:	Barnabas Heta Leo v Mas Solo Investment Limited
Date of hearing:	4 December 2018
Court file number(s):	Civil Case Number 179 of 2018
Jurisdiction:	Civil
Place of delivery:	High Court of Solomon Islands
Judge(s):	Keniapisia PJ
On appeal from:
Order:	Application to set aside default judgment is declined with cost. Application to join new parties to this proceeding is declined with cost. Defendant’s presence on Gonogano is valid by virtue of its felling license and therefore does not amount to trespass. But the license is not to fell and export tubi. Damages for unlawful conversion of tubi to be assessed. Court to hear counsels on what will happen to the proceeds of illegal harvest and sell of tubi. Defendant and cohorts are prohibited permanently from felling and exporting tubi. Court will list a hearing at short notice upon advice by counsel on the matters outstanding in 14.4 and 14.5.
Representation:	Mr. W Togamae for the Claimant Mr. W Rano for the Defendant
Catchwords:
Words and phrases:
Legislation cited:	The Wild Life Protection and Management Act 1998
Cases cited:

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case Number 179 of 2018

BARNABAS HETA LEO
(For himself and Gonogano)
Claimant

V

MAS SOLO INVESTMENT LIMITED
Defendant

Date of Hearing: 4 December 2018
Date of Ruling: 15 February 2019

Mr. W. Togamae for the Claimant
Mr. W. Rano for the Defendant

RULING ON APPLICATIONS

1. Before the court are two applications. One is for setting aside of default judgment. The other is to join third parties (Arimana and Kelimana). Both applications belong to the defendant.

Application for setting aside of Default Judgment

2. I deal first with the setting aside. The joinder application is very much dependent on setting aside. For if I found the setting aside unsuccessful, then that will mean an end to the proceeding. And there will be no talk about joining new parties.
3. The relevant principles of law to consider in application to set aside default judgment are: reasonable cause for delay in filing a defence; arguable defence (meritorious defence); prejudice caused as a result of setting aside and nature of the claim (whether nature of claim warrants early termination or proper investigation at trial).

Reasonable cause for delay

4. I accept the reasons, counsel Rano submitted to explain the delay in filing a defence. That there was irregular service, that there was need to join third parties before filing a defence and there were attempts to consolidate this case with three other related cases. So though a defence would be late by more than 6 months, time can be extended to file a defence out of time.

Arguable defence

5. The claim in the main is for illegal harvest and export of tubi trees. To that main claim there is no arguable defence, or triable issues to warrant trial, in view of the admissions made by defendant. The defendant admitted to illegal harvest of tubi at paragraphs 4, 9 and 10 (b) of the draft defence^[1]. And again in the sworn statement (ss) evidence by Richard Kong filed 10/07/2018 read with his earlier ss filed 19/06/2018. I shall recite the relevant pleadings in full. Paragraphs 4 and 9 of draft defence; defendant admitted as follows:
   • (4). “ Paragraph 4 is admitted in so far as its felling of tubi is concern, but says that felling only occurred up to May 2018. Furthermore it did so by agreement with the tribe and tribal trustees of Gonogano including Arimana. They put to the defendant that they have the authority”.
   • (9). “As to paragraph 9, the defendant says it has applied to the director of environment for a declaration as approved person and pending that declaration for permit to export, those tubi that were already felled for some time (underlined my own emphasis). On 13^th April the director of environment issued the defendant with permit to export. Whilst that permit was subsequently revoked, the export was already made prior to its revocation. The revocation in any event was without the defendant’s knowledge and was made after tubi were exported”.
6. Paragraph 10 (b) of draft defence reads: “The defendant has applied and is about to be declared as such”. Reading with paragraph 10 (a), the defence is pleading that defendant had applied for a permit to export tubi under The Wild Life Protection and Management Act 1998 [No 10 of 1998^[2]] (WLPMA). And was awaiting approval.
7. The court was able to digest all these admissions and to reach the conclusion, that defendant had acknowledged, it felled tubi illegally initially (without permit). It also means that the defendant has no prima facie^[3] defence; from ss evidence and the draft defence. It is very clear that, defendant admitted felling tubi illegally, initially. But was subsequently taking steps to now legalise the illegal act; by obtaining a permit from Director of Environment (DOE). All subsequent rectifying actions do not hold logic in law. For the illegal act is adjudged at the time of illegal harvest. That time according to the claim is around February/March 2018. Defendant’s attempts to obtain export permits were in April/May 2018. I therefore found that, the defendant has admitted to illegal harvest of tubi. And therefore it has no arguable defence or no prima facie defence or no meritorious defence or no further issues to go to trial. The same admissions are also contained in the ss of Mr. Kong filed on 10/07/2018, at paragraphs 6, 7 and 16 where defendant said it made applications for permit in the months of April/May 2018. Defendant was making necessary preparations to submit proper applications meantime it undertook not to fell tubi, waiting for the outcome of the applications^[4]. And read with Mr. Kong’s earlier ss (filed 19/06/2018); it became clear to the Court that defendant and cohorts have felled tubi illegally in the first place. And were later running to the DOE, for permit to export the already illegally harvested tubi. As noted above, illegal harvest of tubi took place in the months of February/March 2018. Defendant applied for permit on 11^th April 2018^[5]. The DOE in response, gave permit to export the already felled stock (tubi), not new felling. This is the only clear and unambiguous conclusion from reading paragraph 2 of the permit letter from DOE dated 13^th April 2018^[6]. Even the permission from Isabel Provincial government, was also obtained on 12^th April 2018.^[7] Application to the Province was made only a day before 11^th April 2018.^[8] Things were happening so fast here. Normally in the Government, things do not happen as fast as seen here. Defendant must have got everything right; to get things moving at this unusual pace, applications made and approvals obtained in the month April 2018; within a matter of days.

Nature of the claim

8. Whether or not the nature of this claim warrant a trial, rather than early termination. In determining whether or not to set aside default judgment, or to grant default judgment, or to proceed to trial, court must have regard to the nature of the claim^[9]. In view of the admissions, there are no further issues to investigate at trial. The defendant did realise and agreed that tubi must be exported with a permit. That was the reason why it was subsequently applying to obtain permit from the DOE. Court would be going down the wrong path if it is to accept that someone can break the law; but can be allowed to subsequently rectify the unlawful act. It will simply open the flood gate for carelessness and blatant disregard for laws and processes; if people know that the court can condone initial illegal acts, if subsequent actions are made and approvals granted by relevant government authorities. Like I say elsewhere above; the Court is adjudging the illegal act at the time of commission, not at a subsequent time, when permits were somehow obtained. In other words; defendant should have obtained permits prior to felling and exporting of tubi. Not the other way round, as defendant admitted to herein.
9. Defendant say that under the Forestry Regulation of 2017^[10], tubi can be exported from mining tenement areas, on Isabel and Choiseul Provinces. For that argument to be considered as an arguable defence; defendant must clearly plead in the defence. Defendant must show that it has utilised and obtained relevant approvals under the provisions of the said Regulation. Such approvals would normally have come from Ministry of Forestry, Ministry of Mining and Isabel Provincial Government; I would imagine. Evidence before the court is that permission from Isabel Provincial Government was only obtained in April 2018. Supposing that defendant was relying on Forestry Regulation of 2017; to justify its felling and export of tubi from a mining tenement area, on Isabel, then it makes no perfect sense, why it was also applying for permit from the DOE; under the WLPMA.
10. As an analogy, it is public knowledge that a felling license does not permit the export of certain protected species of trees like VASA in the form of logs. And that a milling license must be obtained to mill VASA prior to export. If defendant is relying on the Forestry Regulation 2017, to justify its harvest of tubi, then why was it applying for a permit to export tubi from the DOE? Defendant did plead that tubi can be harvested from mining tenement areas. But by applying to the DOE; the defendant was also acknowledging that a permit must still be obtained under the WLPMA to extract and export tubi. I understood the defendant is saying tubi is no longer a protected species under the said Regulation. That it is now a controlled species under Schedule II of the WLPMA 1998 [No. 10 of 1998^[11]]. And so a permit must be obtained from DOE. This explains the defendant’s subsequent applications for permit from DOE in April 2018.

Joining Arimana and Kelimana groups

11. In an attempt to join Arimana and Kelimana; the defendant is saying, it is Arimana and Kelimana and their tribes who have assented to the felling of tubi. The evidence^[12] of that is before the court. Evidence shows that Arimana and tribal members, who are from the same tribe as claimant, have given permission for defendant to fell the tubi for export; under a MOU^[13] dated 8/01/2018, well before application for permit in April/May 2018. Such defence does not make a way out from the illegal harvest. A contract becomes illegal and unenforceable, if it violates against an express prohibition in a statute^[14]. For any lawful harvest of tubi must be preceded by a permit from the DOE under the WLPMA. Defendant did not plead in draft defence that the land owners themselves have a permit to export tubi; from the DOE. Evidence instead showed that Arimana was applying for a permit from DOE on 9^th April 2018. And he admitted in evidence that tubi were already felled prior to him making the application^[15]. So joining them will not raise any arguable defence either. For Kelimana’s^[16] group (Domeolo tribe, LR 706) there is no evidence before the court, to say they were in possession of a valid permit prior to felling. The evidence before court instead showed that defendant was also applying for a permit on behalf of Kelimana’s group on 12^th April 2018^[17]. Either by themselves or jointly with the defendant, these two tribes, must show that they have permit to export tubi from the DOE.
12. What it means in effect is that Arimana and Kelimana, individually or in joint enterprise with the defendant have felled and exported tubi (a controlled species) illegally. The end result is that this court will not render assistance to a person who has founded his cause upon an immoral or illegal act^[18]. By its admission, the defendant has committed the illegal act of felling and exporting tubi; without a permit from DOE under the WLPMA.
13. The next logical question is what will happen to the proceeds of the illegal harvest and export? I will reserve a decision on this till I hear counsels. A decision on this will also have bearing on damages for unlawful conversion of tubi. I can rule now that defendant did not trespass on Gonogano Customary land because; it has a valid felling license to export round logs. There is no challenge in the claim to the validity of defendant’s felling license. That license however does not permit export of tubi (not pleaded in draft defence). For tubi is a controlled or protected species. On the question of damages, for conversion of tubi, court will first hear counsels. Defendant and or anyone is prohibited from felling tubi on Gonogano land; unless permitted by the DOE. Issues of leadership between Claimant and Arimana are raised in the materials. But I will deal with it in the other case^[19]; that is on target on the tribe’s leadership issue. Cost are against defendant on standard basis.
14. Accordingly, court will make the following orders:-
    • 14.1 Application to set aside default judgment is declined with cost.
    • 14.2 Application to join new parties to this proceeding is declined with cost.
    • 14.3 Defendant’s presence on Gonogano is valid by virtue of its felling license and therefore does not amount to trespass. But the license is not to fell and export tubi.
    • 14.4 Damages for unlawful conversion of tubi to be assessed.
    • 14.5 Court to hear counsels on what will happen to the proceeds of illegal harvest and sell of tubi.
    • 14.6 Defendant and cohorts are prohibited permanently from felling and exporting tubi.
    • 14.7 Court will list a hearing at short notice upon advice by counsel on the matters outstanding in 14.4 and 14.5.

THE COURT
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JOHN A KENIAPISIA
PUISNE JUDGE

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^[1] Draft defence at Exhibit RK 1 of sworn statement (ss) by Mr. Kong filed 26/11/2018.
^[2] Read with the accompanying Regulations of 2008.
^[3] Requirement for arguable defence according to “Ross Mining (SI) Limited v Slater and Gordon (2001) SBHC”.
^[4] Quoting from parts of paragraph 16 of ss by Mr. Kong filed 10/07/2018.
^[5] Defendant’s application for permit is at Exhibit RK 3 of ss by Mr. Kong filed 19/06/2018.
^[6] Letter from DOE dated 13/04/2018, Exhibit RK 1 of ss by Mr. Kong filed 19/06/2018.
^[7] Letter dated 12/04/2018 from the Province, at Exhibit RK 1 of ss by Mr. Kong filed 19/06/2018.
^[8] See Exhibit RK 1 of ss by Mr. Kong filed 19/06/2018.
^[9] Sukumaran and others v Pillai and Others cc 396 0f 2012, by Apaniai J.
^[10] Forest Resources and Timber Utilization Act (Protected Species) (Amendment) Regulations 2017; Legal Notice No. 113.
^[11] See Legal Notice N0. 38; gazette on 29^th April 2014.
^[12] See MOU between Arimana and tribe with the defendant at Exhibit RK 1 of ss by Mr. Kong filed 19/06/2018.
^[13] MOU (Memorandum of Understanding) or Contract or Agreement.
^[14] Book on “Contract” by F. R. Davies [1986]; 5^th Edition, Sweet & Maxwell Limited, at pages 160 - 161.
^[15] Paragraph 1 (v) of the letter of 9^th April 2018; Exhibit RK 3 of ss by Mr. Kong filed 19/06/2018.
^[16] Kelimana’s ss filed 26/11/2018, did not say they have prior permit from the DOE.
^[17] Paragraph 6 of ss by Mr. Kong filed 10/07/2018.
^[18] K’Clay v Attorney General [2014] SBCA; SICOA-CAC 09 of 2014 [9^th May 2014]
^[19] Civil Case Number 496 of 2017.