Cheungs Construction Ltd v KCM Properties Ltd [2023] SBHC 9; HCSI-CC 191 of 2003 (6 April 2023)

HIGH COURT OF SOLOMON ISLANDS

Case name:	Cheungs Construction Ltd v KCM Properties Ltd
Citation:
Date of decision:	6 April 2023
Parties:	Cheungs Construction Limited v KCM Properties Limited, Guadalcanal Provincial Assembly, Attorney General
Date of hearing:	3 February 2023
Court file number(s):	191 of 2003
Jurisdiction:	Civil
Place of delivery:
Judge(s):	Keniapisia; PJ
On appeal from:
Order:	Accordingly, I assess damages at $10 million dollars (SBD $10,000,000.00) to the 1st defendant. Cost is awarded against the claimant to be assessed, if not agreed. I will assess cost. File will not be surrendered. I am about to close this file.
Representation:	Ms Waeta’a for the Claimant/Respondent Mr Apaniai for the 1st Defendant/Applicant No Appearance for the 2nd and 3rd Defendants
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IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 191 of 2003

BETWEEN

CHEUNGS CONSTRUCTION LIMITED
Claimant

AND:

KCM PROPERTIES LIMITED
1^st Defendant

AND:

GUADALCANAL PROVINCIAL ASSEMBLY
2^nd Defendant

AND:

ATTORNEY GENERAL
3^rd Defendant

Date of Hearing: 3 February 2023
Date of Ruling: 6 April 2023

Ms Waeta’a for the Claimant/Respondent
Mr Apaniai for the 1^st Defendant/Applicant
No Appearance for the 2^nd and 3^rd Defendants

Ruling on application for assessment of damages

1. Claimant filed the original claim in year 2003. An amended claim was filed on 15/01/2009. First defendant filed defence and counter claim on 6/07/2010. I noted in my earlier ruling delivered on 20/10/2016 (application to stay assessment of damages), the following relevant background facts:-
   • (i) On 14/12/2010, Justice Goldsbrough dismissed claimant’s amended claim and awarded damages to the 1^st defendant, on its counter claim, to be assessed.
   • (ii) Order dismissing claimant’s amended claim and awarding damages to the 1^st defendant on its counter claim was perfected by Justice Goldsbrough on 23/12/2010.
   • (iii) First defendant applied for assessment of damages on 11/12/2015.
   • (iv) There has been a lot of delays in the hearing of that application for many reasons including lawyers’ slackness, frequent change of solicitors and reports from accountants to verify assessment of loss.
   • (v) There was no written ruling to give the reasons for the orders perfected on 23/12/2010. But it was an ex-tempore ruling and reasons would have been given orally in Court. Counsel: Makario (claimant), Sullivan QC and Kingmele of Sol-law (1^st defendant) would have heard the reasons upon receipt of the ex-tempore ruling. This is why Sol-law took out the orders pronounced orally in Court and the Court perfected the orders on 23/12/2010.
   • (vi) Claimant is still to this day waiting for the written reasons (written decision) to make an appeal. At paragraphs 10 and 11 of my 20/10/2016 ruling, I said, despite no written ruling, a condensed perfected order is on file, there is no application for written judgment and no appeal has been filed. At this assessment hearing in 2023, Counsel for the claimant was still lamenting the same issues on no written decision in her written submission. I ruled not to hear anymore submission on the same issues at this 2023 assessment hearing. I strike out parts of Counsel Waeta’a’s written submission on these issues under “Right of Appeal”. Claimant can appeal at any time to the appellate court. But that is not relevant to this assessment hearing.
2. By order perfected on 23/12/2010, the 1^st defendant was awarded damages on its counter claim, to be assessed. The application for assessment was filed on 11/12/2015 and only been heard in 2023 (today). I propose to go back to understand, 1^st defendant’s successful counter claim. The counter claim is at pages 12 - 15, of the Trial Book filed 19/10/2010. I have also read other sworn statements disclosing Musa rental valuation assessment report and the Koraua & Zoloveke Jr assessment of the Musa valuation report. Mr Koraua (Baoro & Associates) and Mr Zoloveke Jr (CBL Certified Practicing Accountants) are 2 renowned senior practicing accountants in Honiara.

1st defendant’s defence and counter claim – filed on 6/7/2010

3. First defendant planned to build a two (2) story building on the disputed land – former Guadalcanal Province headquarters land, next to Point Cruz wharf. That land is currently sitting vacant between Lucky Enterprise shop at Point Cruz wharf and Alvaro building. A builder was engaged to start work in July 2003 and the building should be ready for leasing to tenants in January 2005. The building was to cost $4,000,000.00 according to the contractor with the winning bidder – Kwan Construction (contract was made on 8/06/2003). The 2 storey building would house 12 shops at the ground floor and offices on the first floor. I have evidence that 1^st defendant started to expend money on construction work. Although I noted that accountant Mr. Koraua said he did not have evidence of financial statement to show 1^st defendant has money in the bank. Because 1^st defendant started to expend money to Kwan construction (See pages 97 – 99 of Trial Book), I am satisfied it has money to build.
4. First defendant claimed in assessment that without the stop work orders in this case, issued in August 2003, it would have completed a 2 storey building by January 2005. And would have earned huge income from rentals from the 12 shops on the ground floor and offices on the first floor. The lost estimated revenue it would have earned from building the 2 storey building (rentals foregone and associated loss) is fifty seven million and sixty thousand dollars ($57,060,000.00). The estimated loss was for the period from January 2005 - 2016 (2016 was the year Musa did the rental valuation assessment report). My considered view is that this figure is unjustified, unrealistic, inflated and should be cut down for the following reasons:-
   • (i) The stop work order by High Court lasted from August 2003 – December 2010. After December 2010, the High Court order no longer existed to prohibit the 1^st defendant from erecting the 2 storey building. So any loss attributed to this case would run from August 2003 to December 2010, when the amended claim was dismissed and 1^st defendant’s counter claim succeeded. After December 2010, 1^st defendant was free to build.
   • (ii) Musa report, Koraua assessment and Zoloveke Jr assessment were all based on assumptions and subjected to errors. Musa says that assessing past rental values without corresponding data and evidence is not unusual to result in errors. Koraua said he was not able to know how the estimated cost of $585,303.87 over 7.5 years was arrived at in Musa report. Koraua also said 1^st defendant did not show bank statement evidence of availability of funding to build the $4,000,000.00 2 storey building and that depreciation was not factored in the Musa report. Zoloveke Jr assessment had reservations about Musa report because: building could have been burnt by riot in 2006, non-occupancy of rooms, 2014 - 2016 average rent was $250.00 per square meter and no access to details of financial data etc.
5. The Musa report cover the period from 2003 - 2016 (13 years) and puts the loss at $57,060,000.00. That means for one year the loss will be around $4,389,230.77 (just $4 million dollars in terms of estimates). For 7 years (2003 – 2010) you multiply by 7 and that should be around $28,000,000.00 (in terms of estimates). So I will award $28,000,000.00 in damages to the 1^st defendant for 7 years. Due to the uncertainties or assumptions/reservations/errors observed by Musa and the two accountants mentioned in the preceding paragraph 4, I will deduct $18 million dollars and only award the final quantum of $10 million dollars.
6. Accordingly, I assess damages at $10 million dollars (SBD $10,000,000.00) to the 1^st defendant. Cost is awarded against the claimant to be assessed, if not agreed. I will assess cost. File will not be surrendered. I am about to close this file.

THE COURT
JUSTICE JOHN A KENIAPISIA
PUISNE JUDGE