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SMM Solomon Ltd v Attorney General [2011] SBHC 98; HCSI-CC 258 of 2011 (19 September 2011)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Chetwynd J)

Civil Claim No. 258 of 2011

BETWEEN

SMM SOLOMON Ltd
First Claimant

And

ALFRED JOLIO
(Representing Anika Thai Clan)
Second Claimant

And

MARTIN TANGO
(Representing Thavia Clan)
Third Claimant

And

JAMES UGURA
(Representing Vihuvanagi Tribe)
Fourth Claimant

And

BEN SALUSU
(Representing Vihuvanagi sub tribes or clans
In respect of Chogea and Beajong lands)
Fifth Claimant

And

MAFA PAGU
(Representing Thogokama tribe)
Sixth Claimant

And

PAUL FOTAMANA
(Representing Veronica Lona Clan)
Seventh Claimant

And

ATTORNEY GENERAL
(Representing the Minerals Board)
First Defendant

And

ATTORNEY GENERAL
(Representing the Minister for Mines
Energy and Rural Electrification)
Second Defendant

And

COMMISSIONER OF LANDS
Third Defendant

And

REGISTRAR OF TITLES
Fourth Defendant

And

PACIFIC INVESTMENT AND DEVELOPMENT
Ltd
Fifth Defendant

And

AXIOM KB Ltd
Sixth Defendant

ROBERT MALO, FRANCIS SELO,
LEONARD BAVA, REV WILSON MAPURU

And

ELLIOT CORTEZ
Seventh Defendants

Mr Sullivan QC and Mr Lepe for the Claimants
Mr Banuve for the First, Second, Third and Fourth Defendants
Mr Marahare for the Fifth Defendants
Mr King SC, Mr Pitakaka and Ms Parkin for the Sixth Defendants
Mr Happa for Seventh Defendants
Mr Rano for the Claimants in Civil case 296 of 2011
Mr Thogamae (with watching brief for the applicants for joinder)

Date of Hearing: 14th September 2011
Date of Judgment: 19th September 2011

Decision

1. The Claimants seek an interlocutory injunction against the Sixth Defendant ("Axiom"). The application was filed on 15th July 2011. The matter originally came to court on 21st July. It was dealt with, on an interim basis, by undertakings given by Axiom. The matter was further adjourned to 18th August. On that day Axiom asked for an adjournment on the basis that Senior Counsel from Australia had been instructed but was unavailable. That was a perfectly reasonable application to make and the hearing was further adjourned and the undertakings renewed.

2. The case involves prospective (the pun is not intended) mining operations in Isabel Province. It is not a gross distortion to say the main protagonists are the First Claimant ("SMMS") and Axiom. There is no need to go into all the details of the case but suffice it to say it involves an international tender exercise, a letter of intent issued to SMMS as a result of a successful tender, the "cancellation" of that letter, the issue of a letter of intent to the Fifth Defendant ("Pacific"), the issue of a letter of intent and prospecting licence to Axiom and the registration of a perpetual estate in the names of the Seventh Defendants and subsequent lease to Axiom.

3. The principals applied in a case where a party asks the court for injunctive relief are well known in this jurisdiction (and often called upon) and can briefly be described as those applied in the English Appeal Case, American Cyanamid.

4. The first question to be considered is whether there is a serious issue to be tried. This case involves two main areas, that involving the issue and cancellation of the letter of intent to SMMS and the issue of prospecting licences to Axiom (for the ease of reference I will refer to that area as the mining issue) and that involving the registration of land under the Lands and Titles Act [Cap.133] (or the land issue). It is convenient to deal first with the land issue. The two areas are inextricable linked but can be dealt with separately.

5. The perpetual estate was registered in the names of the Seventh Defendants, apparently after a process under Part V of the Lands and Title Act. There is clearly a serious issue to be tried in respect of that exercise. The Seventh Defendants rely on a Land Acquisition process which commenced in 1992 and completed sometime shortly thereafter, was appealed to the Magistrates' Court; which decision in turn was appealed to the High Court. There is a real question as to whether those persons who were eventually registered as "owners" were those persons identified in the land acquisition process. However, there is an even more fundamental concern which arises. Whilst it is borne in mind that a detailed examination of the strength of the evidence is not required in this application, it has to be observed the claimant landowners in Civil case 258 of 2011 and the Claimant in 296 of 2011 have a very strong case in regard to the land issue. That view is based on the comments of Kabui J in the case of Jack Sipisoa v. Acquisition Officer and Others [1]. He was dealing with what have become sections 60 and 61 in Part V of the Lands and Titles Act and said,

"Sections 59 and 60(1A) of the Act must be read together in order to understand their correct meaning. Section 59 allows both the Commissioner of Lands (in the case of the Central Government) and the Provincial Assembly (in the case of a Provincial Government) to acquire land from customary landowners by way of outright sale or by way of lease. Whichever is the case, the procedure for conversion of customary land interest into registered interest is set out in sections 59 to 69 of the Act. The whole of these sections should be read together in order for one to understand the intent of Parliament in sections 59 and 60(1A) of the Act."

In the case he was considering the acquisition of land in Malaita Province, "The purpose of the said acquisition was to enable private housing development to take place on that land and to serve as security for mortgage purposes" . In other words this was not an acquisition by the Province but for a private individual. His Lordship went on to say, "Section 60(1A) permits the exercise of the power in section 59 only where the Provincial Assembly wishes to buy or lease customary land for its purpose." The Province did not acquire the land and in the circumstances His Lordship felt there was, "an abuse of the acquisition procedure under Part V - Division 1 of the Act." The effect was, "the acquisition procedure in this case is invalid, null and void".

6. The Sixth and Seventh Defendants say they are "protected" in some way by the provisions of section 109 and 110 of the Lands and Title Act. It is difficult to see how they can be given the comments of Kabui J. There never was a registration, the land is still customary land. In any event even if I am wrong and it is somehow registered land, given the timing of the registration of the perpetual estate and the lease to Axiom it is difficult to see how the latter can say it was not aware of the problems. It certainly knew of the differences between various land owners in the area and any suggestion it entered into a commercial arrangement costing over one million dollars a year without obtaining professional advice and on the basis its officers "were impressed" by a document beggars belief.

7. Turning now to the mining issue, Mr King strenuously objected to some material contained in the sworn statement of Mr Ochi filed on 18th July 2011. I intend to refer to one item of that material. The list of material objected to was handed up on the first day of the hearing. There was objection to paragraph 65 of the sworn statement (and the exhibit it referred to) on the grounds of relevance. However, at paragraph 8 of the Sixth Defendants outline submissions filed 9th September there is particular reference to the Cabinet meeting which gave rise to the issue of the cancellation letter. There is also the sworn statement by Mr Kemakeza in which he says, "....cabinet decided to instruct me to cancel the Award and letter of intent". It is difficult to uphold an objection based on relevance to a report commissioned by the Prime Minister and Cabinet on the decision prayed in aid of the defence. Quoting Mr Kwaiga, the author of the report, "Obviously the Cabinet in its decision of the 14th and 17th January 2011 was misled and so its decision was ill conceived. Had the facts were (sic) presented fully taking into account of actual occurrences the decision of Cabinet would be to reject the paper by the Ministry of Mines and the presentation of the minister".

8. When I referred to that difficulty and the apparent conflict between the Minister and Cabinet by quoting Shakespeare (Marcellus to Horatio in Hamlet, "There is something rotten in the state of Denmark") Mr King took umbrage and he obviously felt I was attacking the Sixth Defendant, Axiom. As far as I can see, Axiom is only mentioned once in Mr Kwaiga's report and that in only a peripheral sense. I was happy to point out to Mr King the reference was to "the state" not to his client.

9. The point is whether the situation described by Mr Kwaiga gives rise to a serious issue or question to be tried, namely the circumstances in which the decision to revoke, cancel or whatever; the Award and the letter of intent was made. If the decision, either by the Minister of his own volition or by the Minister at the direction of Cabinet, was premised on the wrong information or facts that would allow the court to exercise its powers of judicial review. Whether or not the situation was as Mr Kwaiga suggests must give rise to a serious issue or question for the court to consider.

10. It is appreciated Axiom say the whole tender process was flawed and we should never have reached the stage where the rights and wrongs of the cancellation are relevant, but the issues argued on that point alone give rise to serious issues to be tried. No matter which way this case is approached there are serious questions to be asked and answered and serious issues to be tried.

11. As is apparently agreed, one of the core issues is the ownership of land. It is said the status quo can be maintained by the Sixth (and Seventh Defendants) being allowed to remain in possession of their own land and therefore the balance of convenience is in favour of those defendants. Given the end result, on the very strong case for the Claimants, is likely to be the land is still customary land, that cannot be the case. The land rights the landowning Claimants have cannot be ignored. The status quo, in respect of the land, can only be maintained by allowing all those who claim to be land owners full and free access to the land as if it were customary land. That would preclude Axiom from exercising any rights or claims based on the lease. It is not so much the use of the land by Axiom which may result in prejudice or harm to the landowning claimants but the exclusion from the land by all those entitled in custom to have full and free access to it according to custom. Given the importance of land in custom it is extremely difficult to see how the interference could be compensated for by damages.

12. It is said Axiom would suffer financially if an injunction were granted. The same could be said for SMMS. There is no doubt that both will suffer financially as a result of this case. However, it is not just a question of weighing up the comparative financial worth of Axiom and SMMS and deciding where the balance of convenience lies. The proper approach is to look at the "wrong" the injunction is sought to prevent. On that basis the balance of convenience is in favour of the Claimants. In any event, an undertaking as to damages has been given by SMMS and if it is unsuccessful in this matter and Axiom do suffer financial loss then it will recover those losses.

13. The injunction is granted. When this was announced in court it was agreed there would be amendments to the terms of the order as prayed in the application filed 15th July 2011. All references to Jejevo were deleted.

14. The applications for joinder (by Bugotu Minerals Ltd) and for amendment of the Claim were adjourned. They have been fixed for 6th December 2011 at 9:30 in the morning.

15. Mr King expressed some concern about delay. I have much sympathy for his views. Unfortunately the plain fact is we are a small jurisdiction and we have limited resources. I will bring the matter to the attention of His Lordship the Chief Justice to see if the matter can be brought on earlier. Once defences are in the matter can be listed for a Chapter 15 conference. If that can be listed before 6th December it is possible the adjourned applications can be heard the same time. All outstanding defences are to be filed and served by close of business on 30th September. Any reply should be filed and served by 18th October.

16. Mr King also expressed concern about my continued involvement in the case based, I believe, on comments I had made. I am not entirely sure which comments. All I would say on that is if the matter is listed before me again and if the Sixth Defendant is uncomfortable with me hearing it the appropriate application should be made then.

17. Costs are in the cause.

Chetwynd J

^[1] [1998] SBHC 96; HCSI-LAC 8 of 1996 (15 June 1998)