Tausuli v Starwood Resources [2020] SBHC 55; HCSI-CC 533 of 2017 (3 July 2020)

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Case name:	Tausuli v Starwood Resources

Citation:

Date of decision:	3 July 2020

Parties:	Joseph Tausuli, Ngu Brother (SI) Limited v Star Resources, New Ocean, Treasury Timbers Limited, Attorney General.

Date of hearing:	23 June 2020

Court file number(s):	533 of 2017

Jurisdiction:	Civil

Place of delivery:

Judge(s):	Kouhota J

On appeal from:

Order:	I find the First Claimant and its director, Joseph Tausuli, and the Second Claimant and its director, Mr. Dereck Ngu, guilty of contempt of Court. I will hear submission on appropriate penalty.

Representation:	L. Kwaiga for Claimant W. Rano for Defendants

Catchwords:

Words and phrases:

Legislation cited:	Solomon Islands Courts( Civil Procedure) Rules 2007, R 23 93, R 2.16

Cases cited:	Moriss v shell Company Pacific Islands Ltd [2003] SBHC 21, Comet Product v Hawkex Plastic [1971] 2 WLR. 361, Yaani v Yanni [1966] 1 W.L. R 120, re Bramblevale Ltd [1971] Ch 128

There are two applications before the court. The first is an application by the claimants to strike out the variation orders signed by the parties and perfected by the court on 7^th November 2017(sic) and the second is an application by the Defendants for contempt under Rule 23(3) of the SI Civil Procedure Rules 2007.

This matter first came to court as an urgent application for the restraining orders against the First and Second Defendants. The interim orders sought were granted and perfected on 10^th November 2017. On 14^th November 2017, the defendants filed their defence to the claim. Normally there should be an interparty hearing but that did not happen instead there was an application by the Defendants seeking interim orders to restrained the Claimants and to vary the interim orders earlier issued in favour of the Claimants.

Following what I believe to be a negotiation between the First and Second Claimants and the First and Second Defendants, the parties enter into a consent variation orders signed by counsels for the parties and perfected by the court on 7^th November 2017. The consent variation orders included a penal notice for breach of the orders.
The Claimants application was premised on the basis that the consent variation orders perfected by the court on 7^th November 2017 were entered irregularly. The Claimants in support of their application relied on the sworn statements of Joseph Tausuli, Chief Philip Sili and others filed between 2017 and June 2020. The sworn statements relied on by the applicants are listed on page 2 of the application.

A consent order is an order agreed to by the parties and ratified by the court. It is tantamount to a contract and binds the parties. It can only be varied or revoked if both parties agreed to vary or revoked the order. Like any other contract, one party cannot just vary or revoke the consent order without consent of the other party unless there is breach by one of the parties.

The consent variation order the subject of this application was signed by counsels for the First claimant and Second Claimants/Applicants and counsel for the First and Second Defendants/Respondent and perfected by the court on 7^th November 2017. I assumed there was a typing error as to the date of perfection but that does not affect the validity of the consent variation order. In that respect, it is a perfectly valid order and it can only be varied by consent of the parties. In Moriss v Shell Company Pacific Islands Ltd [2003] SBHC 21; HC-CC 028 of 2002, Kabui J, said, “A consent order by its nature is a result of an agreement by both parties ratified by the court in the usual manner.” So it was as I said in this case. If it is to be varied or revoked, it must be done with the mutual consent of the parties as well. His Lordship went on and said, “I do not think this court can unilaterally vary or revoke it upon the application of one party without consent of the other party.”

In the present case, the Applicants say that the basis of their application is that the consent variation orders were obtained irregularly. As stated by Kabui J in Morris v Pacific Islands Ltd, “a consent order is an agreement between the parties so it could only be varied, revoked, or discharged by mutual consent of the parties.” The only other situation where a consent order can be varied or revoke on application of one party is if the order is obtained by fraud or mistake.

In the present case, there is no evidence that all the parties to the consent variation order agreed for the consent order to be varied or struck out. The court, therefore, cannot unilaterally strike out the consent orders without consent of the First and Second Defendants. I noted that one of the directors of the First Defendant wishes to have the consent order varied or revoked but other director did not agree. I am of the view that only one director of First Defendant cannot act without the consent of the other director let alone act on behalf of the Second Defendant to strike out or revoke the existing consent variation orders without the consent or authorisation by his co-director and other parties to the agreement.

I had considered the sworn statement filed in support of the application to strike out the consent variation order but found no evidence that the consent order was obtained by fraud or mistake nor did the Applicants pleaded fraud or mistake or undue influence in their application. The Applicants pleaded that consent variation order was obtained irregularly. The Applicants/Claimants, however, did not particularise the irregularity but I take to be a reference to an irregularity under the Civil Procedure Rules 2007, in other words, it was not obtained in accordance with the rules. Rule 2.16 however says that failure to comply with the rules or direction of the court is an irregularity and does not make the proceeding or a document, steps take in the proceeding a nullity. Obviously, under the rules, an irregularity does not make the action void and moreover, I find there is no evidence that the consent variation order was obtained irregularly. For the foregoing reasons the application to strike out the consent variation order perfected dated 7^th November 2017 is refused and dismissed with cost against the Claimants/Respondents.

This application was made pursuant to Rule 23 of the SI Court Civil Procedure Rules 2007, seeking orders against the First and Second Claimants. The application was set to be heard on an earlier occasion but has been adjourned on application by counsels to deal with other outstanding issues. The application was adjourned for hearing on 5^th June 2020. That hearing did not proceed but the court made orders for the Claimants to comply with the existing direction within 14 days. The Claimants also failed and did not open a Joint Trust Account or pay any money into the joint account opened on 23^rd June 2020 on the initiative of the Defendants/Applicants. The Applicants, therefore, seek the following orders;

The Applicants alleged that the First and Second claimants fail to comply with the consent variation order perfected of 7^th November 2017, in that the Claimants failed to facilitate and open a joint trust account and failed to pay the proceeds of logs exported via MV Portland Voy 1706 into a Trust Account and secondly that despite numerous requests by the applicant the Claimants continue to fail. Applicants, therefore, submit and states as follows.

The application for contempt was supported by the sworn statement of Mr. James Wong filed on 14^th February 2020. The sworn statement contained evidence that the Claimants had failed or defied the orders of court. Mr Wong deposes that the Claimants pushed the parties into negotiating and signing the consent variation order but then failed to comply with the orders themselves. He deposes that between 2^nd and 3^rd June 2019, the Defendants’ solicitor informed the Claimants’ solicitor of the breach but nothing was done by the Claimants.

This is an application for civil contempt but it carries a higher burden of proof as in a criminal proceeding. In Comet Product v Hawkex Plastic [1971]2 WLR 361 at 364-365, Lord Denning MR states “Although this is a civil contempt, it partakes of the nature of a criminal charge. The defendant is liable to be punished for it. He may be sent to prison. The rules as to criminal charges have always been applied to such proceedings. I see that Cross J. in Yaani v Yanni [1966] 1 W.L.R.120 so decided; and further we ourselves in this court in re Bramblevale Ltd.[1970] Ch.128, at 137, said that it must be proved with the same degree of satisfaction as in a criminal charge”.

In the present case, the question to be determined by the court is whether, on evidence before the court, the court can conclude that the alleged contempt has been proven beyond reasonable doubt. The burden of proof rest with the Applicant. It is clear from the materials before the court that consent variation order signed between the parties and perfected by the court requires the Claimants to deposit the proceed of logs harvested on Huena land exported via MV Portland Voy 1706 to be deposited in a Joint Trust Account in the named of the Solicitors for the parties. It is the breach of those orders which gave rise to this application. The evidence before the court is that up to the hearing of this application Claimants have not yet complied with the orders of the court.

The Directors of the First Claimant and the Second Claimant were issued notice to appear at the hearing of this application for cross-examination. The director of the Second Claimant/Respondent Mr. Sii Huo Ngu failed to appear despite been served with a notice to appear at the hearing. Only Mr Joseph Tausuli, one of the two directors of the First Claimant, appears at the hearing of this application. When asked why the Claimants failed to deposit the proceeds of the logs exported via MV. Portland voyage1706, stated that the reason they did not deposit the money in a Joint Trust Account was that the logs exported on the ship were harvested on Huena customary land which is within their concession area and not within the concession area of the First and Second Defendants. Unfortunately, that excuse is not a good excuse. The order does not refer to logs harvested on any particular land. It requires that all logs exported via MV Portland voyage No 1706 to be deposited into a Joint Trust Account of Solicitors. The particular orders which the Claimants failed to comply with are orders 2, 3, 4, and 5 of the consent variation orders. Part of these orders is also for the Claimants to produce and provide to the First and Second Defendants all records of log species extracted, felled, hauled and stock filed at Huena, Kokukuve and Jaribuave which were extracted from within Huena, Kokukuve and Jaribuave customary land within 7 days of the receipt of the order.

Mr Kwaiga of counsel for the Claimants submitted that Defendants also contribute to the breach by not taking steps to open a Joint Trust Account as required by the consent variation order. I had considered the materials before the court and my view is that while the defendant is required to corporate with Claimants to open the Joint Trust Account, it was the Claimants who received the money for the logs exported via MV Portland voyage 1706 hence they bear a great responsibility to facilitate the opening of the account. They received the money for the logs exported via MV Portland voyage 1707 but fail to contact the Defendants to work together to open the Joint Trust Account. They have had received the money but still, fail to open the account. Even after a number of reminders by counsel for the First and Second Defendants, Claimants still fail to cooperate to open the Joint Trust Account. The Claimants continue to defy the court's orders up to the day this application was heard.

On the materials before the court, I am satisfied beyond reasonable doubt that the First and Second Claimants have deliberately failed and defied the orders of the court without any lawful or reasonable excuse. I find the First Claimant and its director, Joseph Tausuli, and the Second Claimant and its director, Mr. Dereck Ngu, guilty of contempt of Court. I will hear submission on appropriate penalty.

High Court of Solomon Islands

Tausuli v Starwood Resources [2020] SBHC 55; HCSI-CC 533 of 2017 (3 July 2020)