LCJ Consulting Co. Ltd v Commissioner of Lands [2021] SBHC 44; HCSI-CC 695 of 2020 (21 May 2021)

HIGH COURT OF SOLOMON ISLANDS

Case name:	LCJ Consulting Co. Ltd v Commissioner of Lands
Citation:
Date of decision:	21 May 2021
Parties:	LCJ Consulting Company Limited v Commissioner of Lands
Date of hearing:	10 May 2021
Court file number(s):	695 of 2020
Jurisdiction:	Civil
Place of delivery:
Judge(s):	Keniapisia; PJ
On appeal from:
Order:	Accordingly, the application to strike succeeds Parties can prepare for assessment of compensation. I will assess compensation. And that will be the end of this claim. Order accordingly.
Representation:	Mr. A Ngaingeri and Mr. J. Seuika for the Claimant/ Respondent Mrs. R. Soma for the Defendant/Applicant
Catchwords:
Words and phrases:
Legislation cited:	Solomon Islands Courts (Civil Procedure) Rules 2007, Rule 9.75 (a)-(c), r 9.76, Land and Titles Act [cap 133], , Land and Titles Act 2014 Section (4) (4) (b)
Cases cited:	Korean Enterprises Limited v Attorney General [2014] SBCA 4

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case Number 695 of 2020

BETWEEN

LCJ CONSULTING COMPANY LIMITED
Claimant

AND:

COMMISSIONER OF LANDS
Defendant

Date of Hearing: 10 May 2021
Date of ruling: 21 May 2021

Mr. A. Ngaingeri and Mr. J. Seuika for the Claimant/Respondent
Mrs. R. Soma for the Defendant/ Applicant

RULING ON APPLICATION TO STRIKE CLAIM
Introduction

1. Claimant filed a claim on 31/12/2020. Defendant chose not to file a defence. And instead applied to strike the claim under Rule 9.75 (a) – (c) on 19/02/2021. I will only strike the claim, if no issues for trial have been disclosed from the claim and the sworn statement evidence filed thus far (Rule 9.76).
2. Claimant is the owner of the Fixed Term Estate (“FTE”) in PN 098-011-166 located at Noro township, Western Province. Claimant became the registered owner of the FTE grant in PN 098-011-166 (“PN166”) on or around 15/06/2018. Claimant attempted to build a motel on the land. But was prevented from doing so, due to lack of funding from the commercial banks. The Covid-19 pandemic crisis, made things worse for the claimant. And so in 2020, claimant had decided to sell the FTE in PN 166, to the Ministry of Finance and Treasury (“Ministry”).
3. Evidence shows that claimant was in negotiations with the Ministry for the government to purchase the land. Claimant was trying to make an “overnight windfall gain” from the sale negotiations. Claimant’s initial price offer was $1,372,500.00 (September 2020). In October 2020, the claimant dropped the price offer down to $650, 000.00. But the valuer’s report put the value of the property at $457,500.00. Whilst claimant was still negotiating on a price, an officer from the Ministry, Mr Jerry Kwalu was in contact with the Commissioner of Lands (“COL”). The COL advised the Ministry that since the purpose to purchase the land was public in nature, the COL has legal powers to resume the land back from the FTE grantee under the Land and Titles Act (Cap 133) and the Grant. Purpose to take back the land was to accommodate the establishment and expansion of Customs operations in Noro township. Claimant does not dispute the purpose of the resumption notice by the COL. As a matter of fact, claimant was negotiating to sell the land to the Ministry for the same purpose – establish, accommodate and expand Noro Custom’s operations. Customs fall under the Ministry, as an important department in raising revenue for the State burse. State burse is public fund for public use.

Still negotiating – No Contract – No issues for trial

4. Claimant has been trying to secure a contract, for “an overnight windfall gain”, by selling the land to the Ministry. But nothing tangible and successful had actually come through. Claimant got the land for about $15,000.00 in 2017 (See letter of offer – dated 13/11/2017). But wants to sell it for $1,372,500.00 dollars, then $650, 000.00. Valuer’s report put the value of the land at $457,500.00. That is why I call the negotiations an “overnight windfall gain”. There is no contract, from which the claimant can sue for financial loss and or compensation. There is therefore no issue of financial loss from a contract to reach trial. For claimant was still at the negotiation stage.

Public Purpose – No Issues for trial

5. Claimant does not dispute the public purpose for which the COL, wants to resume back the land. There is therefore no issue for trial as far as the public purpose of the resumption notice is concerned, unlike the Korean case^[1], where the Court of Appeal found that the purpose of COL’s taking back the land was not public purpose, but private commercial and business interest of a private entity, even though the private entity may give out public benefits like employment, payment of tax etc.

Resumption - Unlawful, Null and Void and Unenforceable – No Issues for trial

6. The only grievance claimant had is that the resumption notice by COL, had denied claimant of an opportunity for “an overnight wind fall gain” starting with $1,372,500.00, then $650,000.00. But the Valuer’s report only say true value is around $457, 500.00. Claimant has no improvement on the land (Court will assess later). Claimant only got the land for around $15,000.00. But now wants to have “an overnight windfall gain”.
7. I take notice that the collaborative effort by COL and the Ministry had saved the day for the government. Instead of paying $1,372,500.00, or $650,000.00 or $457,500.00, the COL is resuming the land back under contract (Grant Conditions 3 and 10) and under law - the Land and Titles Act (Cap 133)) as amended in 2014. And COL is willing to pay compensation for improvements made on the land. Claim does not challenge public purpose. Claim does not say COL has no legal power to resume back the FTE. Claim does not challenge procedure to resume. Claim does not challenge purpose of resumption. Yet claimant is seeking declaration that the resumption is unlawful, null and void and unenforceable, without pleading the defective or unlawful basis in law or procedural defect for such a relief. The relief sought is therefore untenable in law. There is no chance in law, for the claim to succeed at trial, as discussed more fully in the next two sub-titles to follow below.

“Reserve right” under contract – Grant Conditions 3 and 10 of the FTE – Grant executed on 13/06/2018 was basically “determined” - No Issues for trial

8. The COL can resume the FTE in PN 166 back for public purpose. This is the normal grant condition that COL as the FTE “grantor” has agreed with every FTE “grantee”. The COL has a reserved right in the grant for specific public purpose. That the COL can resume back every FTE, whenever the FTE is needed for public purpose. Here the COL wants to resume back the FTE for a public purpose - to accommodate and expand the operations of Customs at Noro town. Claimant’s pleadings does not dispute public purpose that COL put out in the resumption notice. So there is no issue for trial, when the COL decides to invoke the reserved rights in Grant Conditions 3 and 10 for public purpose. The COL was merely making a decision and performing a right he is entitled to make under contract (Grant Conditions 3 and 10 – reserve rights).

Section 4 (4) (b) of the Lands and Titles Act (Cap 133), as amended in 2014 (“LTA 2014”) Board and COL has powers and functions to determine FTE for public purpose – No Issues for trial

9. To make things even more stronger for the government, the COL has power under Section 4 (4) (b) of the LTA 2014 to resume the FTE back for public purpose – technically referred to as determining the remaining term of the FTE lease. And when the COL had seen fit to so act - resumption for public purpose, there is nothing to stop him/her in law. Claim does not suggest there was issue with public purpose, or there was issue with the process for resumption or the COL lacks legal authority to resume. So there is no issue for trial. I note this is not a judicial review claim. The only grievance claimant has is – COL’s resumption frustrates claimant’s negotiations for an “overnight windfall gain” (paragraphs 4 and 6 above).
10. Under the LTA 2014, the Board with COL control FTE lands as owners on behalf of the government and the decision to resume is consistent with the powers and functions afforded them, in this case, particularly Section 4 (4) (b) of LTA 2014 the power to execute any instrument relating to an interest in land, is expressed to include the power of resumption, if it may be so described, for the act of determining the lease is not resumption per se, but rather the determination of the lease in accordance with conditions set out in the grant^[2], in this case, exercise of the power to call up and determine the remaining term of the FTE lease, for public purpose^[3].

Compensation – Yes - Issues for trial and can happen quickly without going to full, lengthy and expensive trial

11. The only issue for trial is compensation. I can deal with this issue quickly by assessing what compensation to pay to claimant. The COL does not take issue with compensation in respect of improvements made on the land. Parties can prepare for assessment of compensation, as the alternative remedy, sought in the claim. I will assess all forms of compensations sought in the claim.

Conclusion

12. Accordingly, the application to strike succeeds. The claim does not disclose issues for trial, except compensation to be assessed. Hence the claim does not disclose a reasonable cause of action. The claim challenging the COL’s power to resume does not have a chance to succeed in law. So there is no need to go to trial. No tenable cause with some chance of success has been disclosed for the relief of declaration against the COL’s powers to resume under the LTA 2014 and Grant Conditions. For indeed the COL has power under the LTA 2014 and the Grant to resume back FTE that COL gave to FTE grantees, whenever the FTE is needed for public purpose – reserved right being determined on the FTE term of lease. Will adjourn for one month. Parties can prepare for assessment of compensation. I will assess compensation. And that will be the end of this claim. Order accordingly.

THE COURT
JUSTICE JOHN A KENIAPISIA
PUISNE JUDGE

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^[1] Korean Enterprises Limited v Attorney General [2014] SBCA 4; SICOA-CAC 12 of 2013 (9^th May 2014).
^[2] Conditions 3 and 10 of the Grant executed between COL and Claimant on 13/06/2018.
^[3] Perch Christian Ministry Registered Trustees v Attorney General [2018] SBHC 17; HCSI-CC 490 of 2016 (31^st January 2018) – Justice Brown was adopting the ratio decidendi in Court of Appeal’s Chee Ming Wong v Attorney General CAC 3 of 2010.