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Gasokesa v Orion Ltd [2013] SBHC 27; HCSI-CC 379 of 11 (2 April 2013)

IN THE HIGH COURT OF SOLOMON ISLANDS.
(Faukona J).

Civil Case No. 379 of 2011.

BETWEEN:

D.GASOKESA, K.TAGIA ALAVAE, A.VATOMIKI,
G.SAPIKANA, S.SAPA, F.FOVO, J.PITAKAJI,
M.ROQU, A.MALASA, C.POLOSO,
(BAROKASA Land owners Representative).
Claimants

AND:

ORION LIMITED
Defendant.

Date of Hearing: 12th March, 2013.
Date of Ruling: 2nd April, 2013.

Mr. G. Suri for the Claimants/Applicants.
Mr. D. Tigulu for the Defendant/Respondent.

RULING.

Faukona J: This application is basically for injunctive orders. There are five orders generally sought and are sparsely narrated in the application for injunction filed on 1st March, 2013.

Background facts:

2. On 21st April, 2004, the Choiseul Provincial Executive determined by Form II, that the Claimants were the persons entitled to grant timber rights over Barokasa customary land in South Choiseul.

3. Following the timber rights processes the commissioner of Forest then issued a Felling licence No. A10404 to the Defendant to fell, harvest and extract logs from Barokasa customary land. The Felling licence should expire on 21st June 2009. Upon expiry, the licence was renewed or extended on 22nd September, 2009, which should expire on 22nd September, 2014.

4. Further to the felling licence the Claimants and Defendant executed two Standard Logging Agreements (SLA). One was on 26th March, 2004, and was renewed or extended on 15th July, 2009. Following that, it appears that the Commissioner of Forest had approved the Defendant's operation prior to commencement of this case.

5. After logging operations commenced certain anomaly were alleged to have occurred. Those expressed by Mr Suri's submission as breaches in terms of delay and non-payment of royalty, non-payment of logs used in construction of bridges, lack of reforestation, and non-payment of guarantee bond.

6. Because of the alleged breaches, the Claimants had issued letters and notices to the Defendant and the Commissioner of Forest to terminate the Standard logging Agreement. Since then the Defendant had ceased logging operation but attempt to return to resume logging again on the same customary Barokasa land. The recent encroachment was perhaps in January or February 2013, from the neighbouring customary land Kabovahgara. Hence, need to be ceased, and therefore give rise to this application.

Principles necessary for injunctive relief:

7. The famous American Cyanamid case[1] sets out principles Courts in this jurisdiction have adopted and applied. Pertinent principles advocated by the case are identified as triable issue, inadequacy of damages, under taking and balance of convenience. In the case of Majoria v Jino and clerk to Western CLAC[2] the Court of Appeal applied the test in America Cyanamid case and adopted the principles therein. The test must be satisfied before injunctive relief is ordered. There seem to be in my opinion, different in meaning of the words triable issue and serious issue. Helsbury's laws 4th Edition Reissue of 863 quoted by court of Appeal refer to serious issue and the Cyanamid Case refer to triable issue. There is argument in this case that triable issue cannot be the same as serious issue. I agree with that argument. A triable issue can be mild or serious. Whilst I agree in both contexts, it is a pertinent consideration. In fact both views refer to issues that are contested and that will be argued at trial.

Triable issue:

8. The main issue for trail is whether the Standard Logging Agreement of 29th October executed by the parties is still valid. Subsidiary to that are two other issues, whether Defendant's Felling Licence No. A10404, without a valid Standard Logging Agreement conveys right or authority on it to enter and carry out logging activities on Barokasa customary land, and whether the Defendant's 2013 Annual Harvesting Plan is lawful?

9. From submissions, it is apparent that those issues are hotly contested. There is material evidence which supports opposing views. As such they are indeed triable issues. Mr. Tigulu further argues consenting to issues that they are triable issues but are not serious in nature. I must refute that argument on the basis where a Standard Logging Agreement is invalid it will convey a negative impact on the whole logging operation. Standard Logging Agreement upholds and conveys right and authority to enter customary land and carry out logging activities. Should there be no Standard Logging Agreement or invalid Standard Logging Agreement that should invalidate the whole entire operation.

10. Despite the issues are contested in a new wave camouflaged by seriousness, the fact remains the same, they are triable issues which must be determined at trial.

Damages not adequate:

11. In any logging operation, it is expected that environmental damages including soil, vegetation, forest, rivers which provide habitation for flora and fauna and human has been accepted as irreparable. Worst still where it goes beyond the control of executed Standard of Logging Agreement which often at times met hard opposition from the landowners.

12. Grant of timber rights does not take away the rights of members of the tribe to preserve their forest. To guide against such, Standard Logging Agreement was put in place.

13. When it is alleged the operation has gone beyond what it agreed to have been done, as in this case reckless damage which violates SLA, then normal process of instituting civil suit for interlocutory relief is eminent. The prime purpose is to maintain the status quo that no further damages be done which may not adequately compensated in monetary term. Once environment has gone will take years to replenish itself. And for those years landowners will suffer the consequence of reckless logging with little drinking water available, damages to river bed, top soil, forest which animals and birds build their habitat. Furthermore, no money can able to buy and to rebuild to the state it was before logging. Despite that the claimants are persons who want logging be carried out by another company.

14. In the words of Lord Diplock in American Cyanamid case (at 408 B-C) states,

"If damages ... would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be at that stage"

15. In Solomon Islands environmental damages caused by logging operation are not as such could easily be assessed and valued. It is worthy and in most cases no one is in a financial position to pay. Therefore, damages are inadequate given the reckless logging by the Defence as reveal by material evidence.

Balance of convenience:

16. The famous American Cyanamid case sets out the principle expressed by Lord Diplock in the following words,

"... So unless the material available to the Court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for ........ injunction on the trial the Court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought..."

17. Mr Suri has pointed out three issues to be considered when balancing whether to grant or refuse injunctive relief orders. As to status quo he simply refers to delay of eight months to file original defences that are contrary to requirements of Rules 3.15, 5.14, and 5.21. In doing so tantamount to intention to defeat, avoid or frustrate this case and has no respect to the proceeding that is pending.

18. The question whether the Defendant intended to resort to delay as tactic may not have any basis supported by evidence. Naturally it appears Counsels in this country often lack prompt compliance with the Rules and so often bend them to suit their situation. At times despite bending the rules it was consented by the opposing Counsel. Perhaps, and I would suggest that Court Rules must be strictly complied with. A consequence of non-appliance is also provided for in the Rules and Counsels must access to for their benefits.

19. If the delay was a tactic to frustrate the proceedings to buy time for the recuperation then it is an issue I would consider in balancing the convenience. Meantime eight months delay could be adjudged as failure by the counsel and may also an emerging potion of tactic for delay. In any case it's a matter for balancing.

20. The second issue is short time operation. The allegation of encroachment into Barokasa customary land occurred probably in January or February, 2013. The Defence had just extended its operation from nearby customary land called Kubovangara. The argument was focussed basically on the fact that the Defendant had a valid licence and a valid Standard Logging Agreement. Since then it had been logging Barokasa customary land since 2005. After the licence and Agreement expired they intended to return to log the same land.

21. This case was filed based on breaches alleged to have been committed by the Defendant, hence, this application to the Defendant from re-entering the land.

22. The issue of lack of Standard Logging Agreement is a contested one. There are conflicts of evidence presented by Counsels in their submissions. Mr Suri refers to a number of case laws. One is the case of Linear Perspective Ltd and Orion V Attorney-General[3] where Chetwynd J found that there was a deliberate deceit on behalf of Linear Perspective Ltd. In his own words he said,

"I have not the slightest doubt they were aware at that stage Linear was going to Orion and that in fact their agreement would be with Orion".

23. In paragraph 15 His Lordship further said,

"The landowner can terminate the agreement by notice if the Company becomes insolvent or is wound up, if it's logging licence "is cancelled" the Commissioner or if it breaches any terms of the agreement. In the latter instance, the landowners must give three months written notice of the breaches and what is required to rectify them".

24. Mr Suri reinforces by affirming that the Claimants had given more than 3 months, and no rectification had been carried out. On the other hand Mr Tigulu argues that the Defendant had complied with and rectified all alleged breaches, and made reference to CC No. 217 of 2010 where royalties were paid, a letter from Legal Advisor of the Ministry of Forestry that it is not obliged to pay for logs used in bridge. Reforestation is addressed when logging is completed, and that guaranteed bond had been paid. That the Defendant had been acting on the approval of the Commissioner of Forest.

25. These are contentions arguments in regards to those breaches. As they are intertwined into the major issue which will be heard at trial.

26. Where breaches cannot be rectified then the valid option left for the Company is to suspend all operations. Success Company had done it where it had no authority to carry out any logging on the lands[4].

27. It appears where breaches can be proved in evidence without any rectification was done or carried out the only option is to suspend operation. Whilst the issue of the validity of Standard Logging Agreement is still not determine, the consequence of further damages whilst waiting is futile, hence, I consider the balance of convenience, should in my view, be tilt towards the Claimant.

28. Undertaking execused

Rule 7.38 gives discretion to the Court to require or not undertaking. Requirement of undertaking in damages is a condition to grant interim relief. It means Court may take account the means of the applicant to weigh his capability to make a deposit. One approach was enunciated by Lord Denning in Allan v Jambo Holdings where he stated;

" I do not see why a poor plaintiff should be denied a Mareva just. Because he is poor, where sr a rich plaintiff would get it."

29. In the case of Kalena Timber Co. v Labere[5] the Court of Appeal stated,

"On the other hand ..... it seems to the Court plain that his reason for not requiring undertaking was due to his opinion not to restraint the defendant was going to have a very serious effect not only on the profile of the Plaintiffs but a the disappearance of trees still standing and future damages to the lands and rivers in the area of lands.

30. In considering the application, the Court must also consider the likelihood of success. If the Court satisfied the applicants have a reasonable chance of success in the principle action, it may consider any inability to give undertaking is not a sufficient obstacle to such an order.

31 Having said that and having considered various approaches with whether to grant undertaking or not, in my opinion, undertaking in this case should be excused.

32. In determining the entire application for injunctive relief, I find it reasonable to grant the injunctive orders sought.

Orders:

1. An order restraining the Defendant, by itself, its directors, its servants or agents (including contractors or assignees) from entering occupying or carrying on any form of logging activities (including construction of roads, felling, removing and transporting logs or timber produce) on any location within Barokasa land.

2. An order that the Defendant remove all logging equipment and machineries and their servants and agents from the Barokasa land within 48 hours from the date of the order.

3. An order that the Defendant, by its Managing Director or General Manager, provide to Court, by sworn statement, details of felled logs on Barokasa land, whether taken for sale or not; such detail shall include, quantity, volume, FOB value and date of harvest.

4. Costs of this application are paid by the Defendant.

The Court.

^[1] American Cyanamid co. V Ethicon Ltd (1975) AC 396.
^[2] SI Court of Appeal SI COA No. 16/2008.
^[3] [2011] SBHC; HCSI – CC 157 of 2009.
^[4] [2011] SBHC 65, HCSI-CC 80 of 2009. [16 August 2011].
^[5] [1980] 1 WLR 1257.