HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 288 of 1997

ROBERT RATU (as representative of his line)

-v-

DAKOLAE RESOURCES DEVELOPMENT CO. LTD, LETI PIKO, ALLARDYCE LUMBER CO. LTD, ATTORNEY GENERAL, SECRETARY OF MAROVO AREA COUNCIL

High Court of Solomon Islands
(Muria, C.J.)

Date of Hearing: 22 June 1999
Date of Judgment: 23 July 1999

D. Hou for the Plaintiff
A. Nori for the First and Second Defendants
S. Manetoali for the Fourth Defendant
Ms L. Hamilton for the Fifth Defendant

JUDGMENT

(MURIA CJ): The plaintiff, by his Notice of Motion filed on 1 October 1998, seeks a number of orders. However, at the commencement of the hearing, Mr Hou of Counsel for the plaintiff/applicant only sought the orders prayed in paragraphs 2 and 3 of the notice of motion. The two orders sought are:

“2.	A Declaration by order of Certiorari that the Form II determination of the Marovo Area Council in question is invalid and be revoked ab-initio.

3.	If the Declaration in 2 above is in the affirmative then it be further ordered that:

(a)	The subsequent Form IV Logging Agreement between the Second and First Defendants is invalid and be revoked ab-initio.

(b)	The subsequent Licence Tim 2/93 issued to LETI PIKO and Dakolae Resources Development Company Limited is invalid and be revoked ab-initio.”

The ground relied upon by the plaintiff is that of fraud. It was alleged that the second defendant had falsely represented to the Marovo Area Council at its timber rights hearing on 18 October 1995 that he owned Dakolae Land.

Brief Background

Before I proceed to deal with the issues raised, I feel it would be helpful to set out the brief background to this case. The first defendant had intended to operate a logging venture on Dakolae Land. It therefore applied to Commissioner of Forest Resources for permission to negotiate with the landowners for timber rights. Following that application, the Marovo Area Council (“the Area Council”) conducted a timber rights hearing on 18 October 1995 over Dakolae Land in accordance with the provisions of the Forest Resources and Timber Utilisation Act (“the FRTU Act”).

In the course of the timber rights hearing, objections were invited from interested parties who were present. The plaintiff objected to the timber rights application. His objection was, however, to the boundary of the land as shown on the map produced at the hearing. The Area Council considered the first defendant’s application and objection from the plaintiff and determined that the second defendant and his line had the right to grant timber rights over Dakolae Land. The Form II determination was duly issued on 23 October 1995. There was no appeal against the Area Council’s determination and so on 20 December 1996, the Commissioner of Forest Resources issued the Licence No. TIM 2/93.

The third defendant is a logging company operating in Solomon Islands. By virtue of a management agreement dated 22 July 1997 entered into between the first and the third defendants, it was agreed that the third defendant would conduct timber operations on Dakolae Land pursuant to the Timber Licence which was granted to the first defendant on 20 December 1996.

Issues raised for determination

As the two orders sought by the plaintiff are based on the alleged fraud on the part of the second defendant, the issue here is really whether fraud had been committed by the second defendant. Allied to that is the other question as to whether the Area Council’s determination had been tainted with fraud. The centre of contention in these proceedings, in fact, revolves around the High Court decision in the Native Land Appeal No. 11 of 1973, Judgment dated 30 October 1973, concerning the land in question. That High Court decision was made following an appeal from the decision of the Marovo Native Court in Civil Case No. 6 of 1971.

The Plaintiff’s argument

Counsel for the plaintiff submitted that the second defendant falsely represented to the Area Council at the timber rights hearing that he owned Dakolae Land. Mr Hou submitted that the second defendant relied on the High Court decision made in 30 October 1973 which decision confirmed that of the Native Court. But counsel argued that those decisions did not demarcate the boundary of Dakolae Land. So that when the second defendant relied on those decisions as to his ownership and the boundary of the land, he was falsely representing his position over the land and thereby deliberately misleading the Area Council.

A further point was also raised by Mr Hou regarding the “computer print-out” copy of the Native Court decision of 16 November 1971. Counsel suggested that the record of the proceedings in the Native Court in 1971 was handwritten and the decision could not have been typed in and printed out of a computer. That argued counsel goes to support the allegation of false representation on the part of the second defendant.

There was suggestion that when the plaintiff objected to the boundary of the land, the Area Council called on both parties to rectify it. That was said to have been done but Mr Hou argued that there was no record of that being done.

All in all the plaintiff’s contention is that the second defendant had falsely represented his position as to his ownership and the boundary of Dakolae Land to the Area Council at the timber rights hearing. Thus, counsel suggested, the Area Council’s determination had been tainted with fraud and should be declared null and void and so were the subsequent Form IV Agreement and the Licence, TIM 2/93.

The argument for the first and second defendants

Mr Nori of counsel for the first and second defendants contended that firstly, the Area Council timber rights hearing was properly conducted in accordance with the procedure laid down under the FRTU Act. There had been no complaint up to now and in these proceedings, as to the manner in which the Area Council conducted its timber rights hearing on 18 October 1995.

Secondly, Mr Nori submitted that there was nothing before the Area Council which could be regarded as false representation on the part of the second defendant. The High Court decision confirmed the Native Court’s decision in favour of the second defendant and so the second defendant was entitled to rely on it. The Area Council accepted the High Court’s decision. Thus, counsel argued, no action on the part of the second defendant emanating from the use of that High Court decision could be seen as false representation.

As regard the “computer print-out” copy of the Native Court decision, that had never been produced at the Area Council timber rights hearing. So the Area Council could not have been defrauded by that document which was only made known well after the Area Council timber rights hearing.

On the question of boundary, Mr Nori contended that the issue of boundary had been resolved before the Area Council concluded its hearing. Following the objection made by the plaintiff, the Area Council adjourned its hearing to enable the parties to resolve their differences over the boundary. That was done and the Minutes of the hearing confirmed that to be so.

Thus Mr Nori urged the court to dismiss the plaintiff’s application since the allegation of fraud against his clients does not have any substance in it.

The Argument for the fifth defendant

Ms Hamilton of Counsel for the fifth defendant (Marovo Area Council) supported Mr Nori’s contention in these proceedings. She reiterated that the only document relied on by the second defendant at the Area Council hearing to show his ownership in Dakolae Land was the High Court decision which confirmed the second defendant’s rights on the land. As such, the second defendant was entitled to rely on that decision and the Area Council accepted that decision.

Counsel again reiterated that at the Area Council timber rights hearing, there was no objection to the second defendant’s ownership over Dakolae Land and that the only objection raised was as to the boundary. That counsel submitted, had been resolved following a consultation between the plaintiff and second defendant. The Minutes of the hearing confirmed that the boundary issue had been resolved and the map of the land in question was accordingly rectified.

Thus, Ms Hamilton submitted no fraud could possibly be said to have been committed in this case either by the second defendant or upon the Area Council.

The law and test of fraud

It is settled law that a person cannot be allowed to keep a material advantage which he obtained by fraud. This is because fraud unravels everything. Because of its serious repercussions, the Courts have been cautious not to easily find fraud unless it is clearly proved. However once it is proved, it vitiates all transactions as well as decisions of the courts or tribunals or other authorities.

The definition of “fraud” as stated in Barclay’s Bank Ltd -v- Cole [1966] 3 All E.R. 948 had been followed in this jurisdiction in the case of R -v- Customary Land Appeal Court (Western) ex parte Simi Pitakaka [1985-1986] SILR 69 where it was stated that:

““Fraud” in ordinary speech means the using of false representations to obtain an unjust advantage: see the definition in the Shorter Oxford English Dictionary. Likewise in law “fraud” is proved when it is shown that a false representation has been made knowingly or without belief in its truth, or recklessly, careless whether it be true or false.”

Where fraud has been alleged, in a civil case such as this, it is on the party alleging it who must prove it clearly to the entire satisfaction of the court. It must be shown that the representation was false together with any of the following, namely: (1) that it was made knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Thus, the plaintiff in the present case bears the burden of establishing these elements of the allegation.

Not only that the plaintiff alleged fraud on the part of the second defendant in this case, he also alleged that the Area Council’s decision had been influenced by the fraud committed by the second defendant. The plaintiff must therefore also show, not only that the second defendant intended the Area Council to act on the false representation but that the Area Council actually acted upon it. Short of these requirements, the allegation cannot stand.

Applying the law to the facts in the present case

At the timber rights hearing before the Area Council, the second defendant spoke on behalf of his tribe supporting the first defendant’s application for timber rights on Dakolae Land. At that hearing, the second defendant relied on the High Court decision which was accepted by the Area Council and which confirmed his tribe’s rights over Dakolae Land.

Objections were invited from interested parties. No objection was raised regarding the second defendant’s right of ownership over that part of the land covered by the application for timber rights. The only objection was to the boundary which the plaintiff said had extended to other land adjacent to Dakolae Land. In the light of that objection, the Area Council adjourned its hearing and allowed the parties to resolve their differences regarding the boundary. The record of the hearing shows that the parties resolved their boundary differences.

Having heard those in support of the application and the objectors and having accepted the High Court decision relied on by the second defendant, the Area Council determined on 18 October 1995 that the second defendant and his tribe had the right to grant timber rights over Dakolae Land. No appeal had been lodged against that determination as provided for under the FRTU Act.

The evidence before the Court clearly demonstrates that there was nothing unbecoming about the second defendant’s conduct of his case before the Area Council. That being so, I do not see how an allegation of fraud can even be raised in such a case against the second defendant. The High Court decision was in favour of the second defendant and so he was entitled to rely on it to support his case before the Area Council. Any representation by the second defendant that he was relying on that High Court decision could not be in anyway a false representation calculated to bring an unjust advantage to him. It might well be that the boundary was not clearly defined in that decision, but that was the reason for the Area Council adjourning its hearing to enable the parties to resolve that issue which they did.

The plaintiff sought to draw a great deal of support from the “computer print-out” copy of the Native Court decision. The subsequent discovery of that “computer print-out” document convinced the plaintiff that the Area Council’s decision must have been tainted with fraud. There are two reasons why that “computer print-out” document is of no help to the plaintiff’s case in these proceedings. Firstly, as confirmed by the plaintiff himself in his affidavit filed on 24 November 1997, that document was never placed before the Area Council at the time of the timber rights hearing on 18 October 1995. It could not, even if it was an untrue representation of the Native Court decision over Dakolae Land, have been a false representation intended for the Area Council to act upon and actually acted upon by the Area Council at the time. It never existed as far as the Area Council was concerned and therefore had no bearing on its determination at the time of the hearing.

Secondly, the “computer print-out” document was only discovered by the plaintiff in October 1997, two years after the timber rights hearing. Even if there was something wrong with that document, the plaintiff would have a hard row to hoe in convincing the court that the said document was used by the second defendant on 18 October 1995 to support his timber rights application at the hearing before the Area Council, for the same reasons as I have stated above.

Applying the law to the facts as disclosed in these proceedings, there can be no doubt that the requirement of fraud cannot be met in this case and the allegation must fail.

Conclusion

There is no evidence to sustain the allegation of fraud in this case. the proceedings and subsequent determination of the Area Council in favour of the second defendant can in no way be said to have been tainted by fraud. The procedure followed by the Area Council was proper and not having been tainted by fraud, it must stand. It was valid. The subsequent granting of timber rights and licence to the first defendant must therefore be also valid.

The application is dismissed with costs to the defendants to be paid by the plaintiff.

(GJB Muria)
CHIEF JUSTICE