Commissioner of Forest Resources v Mega Enterprises Ltd [2012] SBMC 7; Civil Case 83 of 2011 (13 July 2012)

SOLOMON ISLANDS
IN THE HONIARA MAGISTRATE'S COURT

Civil Case No: CC83, 85 & 87 of 2011

BETWEEN:

Commissioner of Forest Resources
Complainant/ Respondent

AND:

Mega Enterprises Limited
First Defendant/Appellant

AND:

Ruruma Development Company
Second Defendant/Appellant

AND:

Glengrow (SI) Company Limited
Third Defendant/Appellant

Counsel for the Complainant/Respondent: Mr John Muria
Counsel for the 1st Defendant/Appellant: Mr Michael Pitakaka
Counsel for the 2nd Defendant/Appellant: Mr Wilson Rano
Counsel for the 3rd Defendant/Appellant: Mr Donald Marahare

Date of Hearing: 22nd June 2012
Date of Judgment: 13th July 2012

JUDGMENT

Background

(1) On the 11/5/11, the Commissioner of Forest Resources (Commissioner) seized the logs felled by Eddie Kera (trading as Ruruma Development Company (Ruruma) and seized the logging equipments and machines belonging to Mega Enterprises Limited (Mega) pursuant to Section 33 of the Forest Resources and Timber Utilisation Act (the Act).

(2) . As a result of the seizure by the Commissioner the following appeals were filed:-

• (a) Ruruma filed appeal No. 83/2011 against the Commissioner.
  
• (b) Mega file appeal No. 85/2011 against the Commissioner.
  

(3) On 15/6/11 my brother magistrate Mr Rodgers Tovosia upon hearing counsels for Mega, Ruruma and the Commissioner made the following orders:

1. That all logs totalling 3658.119 m3 at the Ruruma log pond to be exported by Mega Enterprises Ltd.
   
2. That any logs already felled and lying in the bush in Lot 17 to be hauled to the log pond and sold by Mega Enterprises Ltd under the supervision of the Commissioner of Forest or any of its assigned officer;
   
3. That the Commissioner of Forest shall release such necessary machineries to assist Mega Enterprises Ltd to effect order 2 above;
   
4. That Mega Enterprises Ltd shall give 3 clear days notice to the Commissioner of Forest before it carries out order 2 above;
   
5. Proceeds of all logs minus export duties to be held in trust in the name of solicitors for the parties in Civil Case 83 of 2011 and 85 of 2011;
   
6. Liberty to apply on 3 days notice;
   
7. Cost in the cause;
   

3. The logs could not be exported as the logging licence had expired on the 17/6/11 and at the request of the counsel for the Commissioner, I ordered that a special permit be issued by the Commissioner to facilitate the orders made on 15/6/11.
   
4. On the 22/6/11 Mr J. Muria advised me that he lodged had an appeal against the orders made by Mr Tovosia and myself on 15/6/11 and 17/6/11 respectively and made an application for stay of those orders and I adjourned the application for stay to 24/6/11 and ordered that further material be filed before I could consider it.
   
5. On the 24/6/11 Mr John Muria was sick and the matter was adjourned to 29/6/11.
   
6. On 29/6/11 Mr J. Muria withdrew his application for stay and Glengrow (SI) Limited (Glengrow) became a party to the proceedings by filing an appeal (case no 87/2011) against the Commissioner. Mr Muria together with all the parties agreed to the logs being shipped and further agreed that the proceeds of sale of log shall be deposited with the Central Bank of Solomon Islands and the following consent orders were made:
   

(a) That the proceeds of the sale of the logs which has already been loaded on the ship Pacific Bhangu is to be deposited in the Central Bank of Solomon Islands and is to be paid out in accordance of the orders of this court.

(b) That all logs which has already been felled shall be shipped in accordance with the orders made on 15/6/11. It is further ordered that the shipment is to be supervised by the respondent (Commissioner of Forest) and upon sale of the logs the proceeds is to be paid out in accordance with the orders of this court.

(c) It is further ordered that appeal numbers 83/2011, 85/2011 and 87/2011 shall be consolidated and to be heard together.

7. The following properties belonging to Mega were seized by the Commissioner:
   

(a) 2 units Nissan log trucks

(b) 2 units Hitachi Excavators

(c) 3 units Caterpillar Bulldozers

(d) 3 units Shantui Bulldozers

(e) 2 units Nissan Dump trucks

(f) 2 units wheel loaders

(g) 3 units Toyota Land Cruisers

(h) 1 unit Caterpillars Motograders

(i) 6 units Stilh chainsaws

8. On 26/9/11 all the parties to the consolidated proceedings filed an agreed facts which reads as follows:
   

28 December 2007	Technology and Management Agreement signed between RDC and Mega Enterprises Ltd.
31 March 2009	Grant of Profit Instrument executed in favour of RDC
16 April 2009	Registrar of Titles registered in favour of RDC a Grant of Profit Instrument
12 May 2009	Felling Licence No. A10247 issued to RDC – will expire on 12 May 2011.
13 May 2009	Mega Enterprises Limited commenced operations but was subsequently stopped as a result of continued dispute with Isabel Province under Civil Case No. 89 of 2008.
14 October 2010	High Court held in Civil Case No. 89 of 2008 that Grant of Profit registered in favour of Glengrow (SI) Co Ltd is not exclusive.
8 November 2010	RDC and Mega Enterprises settled with IPG in Civil Case No. 89 of 2008.
December 13, 2010	Grant of Profit given to Sia Enterprises Limited.
	Release signed by Trustees of Ruruma.
December 17, 2010	Grant of Profit registered to Sia Enterprises Ltd (at this stage RDC not yet aware of the registration)
16 February 2011	RDC in conjunction with Mega Enterprises Ltd submitted its annual harvesting plan for 2011.
17 February 2011	Commissioner of Forest Resources approved RDC harvesting plan
18 February 2011	Mr Eddie Kera the proprietor of RDC wrote to the Commissioner of Forest Resources for the renewal of Felling Licence No. A10247.
5 March 2011	Mega Enterprises Ltd entered parcel number 071-001-4 on the understanding that its agreement with the claimant is still valid
Mar 23, 2011	Certification of Grant of Profit for Sia Enterprises limited and advise that grant of profit for Ruruma Development Company has been released.
March 24, 2011	Collaboration and Development Agreement entered into by Mega Enterprises Limited and Premier of Isabel Province.
24 March 2011	Development and Collaboration Agreement and Grant of Profit Instrument were executed between Mega Enterprises Limited and the Premier of Isabel Province.
28 March 2011	Searches were conducted at Registrar of Titles office by RDC the following were discovered:

(a) That a grant of profit was registered in favour of Sia Enterprises Ltd on 16 December 2010;

(b) That the Grant of Profit in favour of Sia Enterprises Ltd was executed on 13 December 2010 by the said Moffat Bule, John Kera, Mannaseh Haridi and Benaiah Denabole; and

(c) That the grant registered in favour of Ruruma Development Company was extinguished on 16 December 2010 pursuant to a Release Instrument No. 742/10 executed by the said John Kera, Moffat Bule and Benaiah Denabole on an unknown date.

Upon extensive investigation, RDC discovered that the Release Form 23 was executed by the said John Kera, Moffat Bule and Benaiah Denabole on or about 13 December 2010 – however Benaiah Denabole could have signed on 13 December 2010 as alleged as he died in 2009.

13 April 2011	RDC executed a new grant of profit instrument with the said John Kera and Moffat Bule for a period of 6 years.
April 19, 2011	Forest Officers compiled Report on encroachment into Lot 17 and Lot 18 by Mega Enterprises Limited.
	Notice to Show Cause why Seizure Notice should not be issued by Commissioner of Forests
April 20, 2011	Wilson Rano, on behalf of Isabel Province, makes representation in response to Notice issued on April 19, 2011.
26 April 2011	Eddie Kera lodged the grant for registration at the Ministry of Lands, Housing and Survey but was held up.
May 10, 2011	Wilson Rano, on behalf of Isabel Province, makes representation to Commissioner of Forest to issue licence to Mega Enterprises.
	Provincial Secretary for Isabel Province writes to Commissioner of Forest asking the Commissioner of Forests to issue licence to Mega Enterprises.
	Application for registration of Grant of Profit for Mega Enterprises Limited lodged at Registrar General's office
May 11, 2011	Commissioner of Forests issues Notice of Seizure.
May 12, 2011	Ruruma Development Company's licence expires.
	Letter from Commissioner of Forests to Mr Rano, in response to Mr Rano's letter dated May 10, 2011.
June 26, 2011	Isabel Provincial Premier terminates all dealing with Mega Enterprises Limited.
July 14, 2011	Resolution by Isabel Provincial Executive revoking the Province's approval for Grant of Profit application and Technology Agreement by Mega Enterprise Limited.

Further Facts

(1) Isabel Province is the registered owner of Lot 17 and Lot 18.

(2) Mega Enterprises Limited has no license covering Lot 17 and 18.

(3) Lots 17 & 18 are covered by Licence No. A10767 issued to Glengrow (SI) Company Ltd. Licence A10767 was issued on the 15th November 2007 and will expire on 15th November 2012.

(4) Glengrow (SI) Ltd currently holds a Grant of Profit over Lots 17 & 18 (that profit was held by the High Court in Civil Case No. 89 of 2008 to be not exclusive);

(5) Mega Enterprises Ltd sign a Development and Collaboration Agreement on 24 March 2011 with the Premier of Isabel Province;

(6) Mega Enterprises Ltd executed a Grant of Profit with Premier of Isabel Province;

(7) Logging was carried by Mega Enterprises Ltd sometimes after 24 March 2011, however actual entrance is sometimes about 5 March 2011 on the Ruruma blocks;

(8) Grant of Profit Instrument was lodged on or about 27 April for registration;

(9) Ruruma Development Company's licence has not been renewed;

(10) Ruruma Development Company does not have a grant of profit over Lots 4, 8 and 16

(11) Sia Enterprises Limited now holds grant of profit over Lots 4, 8 and 16.

9. On or about 27/1/12 Mega had reached a settlement with the Commissioner and all its machinery listed in paragraph 6 hereof were released and it filed notice of discontinue of appeal on 27/1/12 and thereafter Mega as well as Ruruma have not been part of this proceedings.
   
10. The only party left in the proceedings were the Commissioner and Glengrow and on 16/3/12 they filed a set of agreed facts which reads as follows:
    

December 13, 2010	Grant of Profit given to Sia Enterprises Limited. Release signed by Trustees of Ruruma
December 17, 2010	Grant of Profit registered to Sia Enterprises Limited
February 18, 2011	Application was submitted to Commissioner of Forests by Ruruma Development Company for an extension of Ruruma Development Licence.
March 23, 2011	Certification of grant of Profit for Sia Enterprises Limited and advise that grant of profit for Ruruma Development Company has been released.
March 24, 2011	Collaboration and Development Agreement entered into by Mega Enterprises Limited and Premier of Isabel Province
April 19, 2011	Forest Officers complied Report on encroachment into Lot 17 and Lot 18 by Mega Enterprises Limited.
	Notice to Show Cause why Seizure Notice should not be issued by Commissioner of Forests.
April 20, 2011	Wilson Rano, on behalf of Isabel Province, makes representation in response to Notice issued on April 19, 2011.
May 10, 2011	Wilson Rano, on behalf of Isabel Province, makes representation to the Commissioner of Forest to issue licence to Mega Enterprises.
	Provincial Secretary for Isabel Province writes to Commissioner of Forest asking the Commissioner of Forests to issue licence to Mega Enterprises.
	Application for registration of Grant of Profit for Mega Enterprises Limited lodged at Registrar General's office.
May 11, 2011	Commissioner of Forests issues Notice of Seizure.
May 12, 2011	Ruruma Development Company's license expires.
	Letter from Commissioner of Forests to Mr Rano, in response to Mr Rano's letter dated May 10, 2011.
June 26, 2011	Isabel Provincial Premier terminates all dealing with Mega Enterprises Limited.
July 14, 2011	Resolution by Isabel Provincial Executive revoking the Province's approval for Grant of Profit application and Technology Agreement by Mega Enterprises Limited.

UNDISPUTED FACT

11. It is conceded by the Commissioner that Glengrow holds a grant of profit over the land described at Lots 17 and 18 of LR 516, Allardyce Track, Isabel Province and further that Mega and Ruruma were operating illegally in that land and felled and extracted logs which led to the Commissioner serving seizure notice and subsequently seizing the logs and machinery belonging to Mega.
    
12. As a result of the consent orders made on 29/6/11 the logs were allowed to be exported and the proceeds in the sum of $1,373,479.01 was deposited in the Central Bank of Solomon Islands.
    

Issue for determination

13. The issue for determination is whether Glengrow is entitled to claim for the forest produce (logs) and or moneys derived from the sale of such forest produce seized by the Commissioner.
    

(14) The parties did not adduce any oral evidence and relied on the sworn statements and agreed facts. On 17/4/12 both parties filed written submissions.

(15) It is conceded by the Commissioner that the logs which were seized were illegally felled and extracted by Mega and that Glengrow held a grant of profit over the land from which it was extracted. The Commissioner responded to Mr Rano & Company's letter dated 10/5/11 in the following terms on 12/5/11:

"Re: issue of Felling Licence to Mega Enterprises Ltd over Lot 17 of LR 515.

Thank you for your letter dated 10th May 2011 pertaining to the above.

Whilst we acknowledge the explanation on your letter pertaining to the grant of profit, we wish to inform you that there is already an existing felling licence over the Parcel number 071-001-17, Allardyce Track. This felling licence A10767 was issued to Glengrow (SI) Company Ltd on the 15th November 2007 and is valid till 15th November 2012. As such, we regret to inform that we cannot issue another felling licence over an existing felling licence as two licences cannot be issued over the same area.

We appreciate your kind understanding in this matter."

(16) The Commissioner's letter dated 12/5/11 clearly established that there was an existing logging licence issued to Glengrow and the agreed facts dated 16/3/12 clearly shows that Forest officer's report on 19/4/11 established that Mega was encroaching into Lots 17 & 18 and the Commissioner invoked the powers vested in him under Section 33 of the Act and seized the forest produce, machinery and equipments of Mega.

(17) Section 37 of the Act gives power to the persons interested in the property seized to file an appeal to the Magistrate Court and the appeal was filed by Glengrow on 23/6/11.

Section 37 reads as follows:

"Any person claiming to be interested in any property seized under Section 33 may, within one month from the service or publication of a notice in respect of such property under section 35 (2), appeal to a Magistrate against the taking into possession of such property"

(18) Section 37 should be read in conjunction with Section 35 which sets out the steps to be followed by the Commissioner where a forest offence has been committed by a person who is unknown or cannot be found. In this case no forest offence was committed by Glengrow and the Commissioner clearly knew well before the seizure that the logs belonged to Glengrow so in my view the Commissioner was under an obligation at that stage to return the logs to Glengrow which he failed to do and Glengrow had no choice but to file an appeal pursuant to Section 37 of the Act.

(19) In my view the conversion of the logs into money by sale makes no difference as Glengrow was the rightful owner of the logs when it was seized and continued to the owner of the proceeds of the logs.

Conclusion

(20) In the circumstances I order that the sum of $1,373,479.01 (SBD) held in the Central Bank of Solomon Islands shall be paid out to Glengrow.

Shafi Khan
Principal Magistrate