HIGH COURT OF SOLOMON ISLANDS

Case name: 	Global (SI) Ltd v Ahukela 	
		
Citation:		
		
Date of decision: 	29 November 2024 	
		
Parties: 	Global (SI) Limited v Luther Ahukela 	
		
Date of hearing: 	15 and 19 November 2024	
		
Court file number(s): 	166 of 2024	
		
Jurisdiction: 	Civil 	
		
Place of delivery: 		
		
Judge(s): 	Lawry; PJ	
		
On appeal from:		
		
Order:	1. On the claim there is judgment for the Claimant in the sum of $141,253.92.
2. On the counter claim there is judgment in favour of Global (SI) Ltd, the defendant in the counterclaim.
3. The Court alerts the Commissioner of Forests that the judgment sum includes an allowance for what is claimed to be outstanding royalties and the 5% fee for the licence, those sums having already been paid to the Defendant by the Claimant.
4. This ruling does not make the Defendant liable for advances made to others as shown in the ledger.
5. The Defendant is to pay the costs of the Claimant on an indemnity basis.	
		
Representation: 	Mr D Nimepo for the Claimant 
Mr M Haurii for the Defendant 	
		
Catchwords: 		
		
Words and phrases:		
		
Legislation cited:	Solomon Islands Courts (Civil Procedure) Rule 2007, r 1.3 and 1.14	
		
Cases cited:		

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 166 of 2024

BETWEEN 

GLOBAL (SI) LIMITED 
Claimant 

AND: 

LUTHER AHUKELA 
Second 

Date of Hearing: 15 and 19 November 2024
Date of Judgment: 29 November 2024

Counsel 
Mr D Nimepo for the Claimant 
Mr M Haurii for the Defendant 

Lawry; PJ
JUDGMENT 
1. 	Luther Ahukela was trading under the business name Mapo Development Company [‘Mapo’] which was the holder of felling licence A10415. Global (SI) Ltd [‘Global’] works as a logging contractor and entered into a Technology Management Agreement with Mapo carrying out logging in South Malaita.
2. 	 Global alleges that it has made advances to Mapo/Luther Ahukela and those advances on royalties have not been repaid.
3. 	Mapo does not dispute that advances were made but claims the proceedings have come about as result of complaints that royalties have not been paid. Mapo says that advances could only be made in relation to the 5% of proceeds that are to be paid to Mapo as the licence holder.
4. 	Global relied on the evidence of Lau Hui Kwong and of Luther Ahukela. Mr Kwong’s evidence was admitted as an unavailable witness as he died earlier this year. For Mapo Mr Haurii filed a document titled ‘Extract Submission’ in which at paragraph 2 he set out the following:
	“REQUESTED ISSUES FOR DETERMINATION
	2. There has not been any pre-trial conference held and the Court has set the matter for trial on 15/11/24. In that respect, I submit to request the Court to consider these issues, if the Court may agree:
	(1) Whether the claimant has proved beyond balance of probabilities that the defendant had advanced the sum of $402,417.87 from the claimant as per their agreement or not?
	(2) Whether the claimant’s claim will sustain in the event where the claimant had failed to make reply to the defence of the defendant and its sworn statement in support or not.
	(3) Whether the counter claim of the defendant can be sustained so the Court to award the counter claim against the claimant where the claimant had failed to file a defence?
	(4) Whether the Court can give an order for the Commissioner to release the performance bond to meet the defendant’s claim for royalties and CDF in view of the Forest and Timber Utilisation (Felling Licences) Regulation 2005?”
5. 	The assertion that there has not been a pre-trial conference is misleading. The Defendant Luther Ahukela filed his defence and counterclaim on 5 July 2024. There was a direction hearing on 15 August 2024 but there was no appearance by or on behalf of the Defendant on that date. The Court set a date for a pre-trial conference being 19 September 2024. On 23 August 2024 the Defendant filed a sworn statement but there was again no appearance for the Defendant at the pre-trial conference on 19 September 2024. The Court noted that the pre-trial conference was vacated and a directions hearing was scheduled for 3 October 2024. On 3 October 2024 there was yet again no appearance for the Defendant. The Court fixed a further pre-trial conference for 23 October 2024 and reserved costs.
6. 	On 3 October 2024 the Claimant Global filed its reply to the Defence and Defence to the Counterclaim. At the pre-trial conference on 23 October 2024 there was yet again no appearance for the Defendant. The trial date was set for 15 November 2024. In light of the limited material on file and the repeated failures to attend hearings by the Defendant or his counsel, the Court directed that there was no need for a Court book or index to be filed. This order was made relying on rule 1.3 and 1.14 of the Solomon Islands Courts (Civil Procedure) Rules 2007. In short there had been two pre-trial conferences set but counsel for the Defendant did not attend either.
7. 	At paragraph 2(1) of the Extract Submission, the Defendant correctly identified an issue concerning the allegation of advances being made.  At paragraph 2(2) of the Extract Counsel alleged that the Claimant had failed to reply to the defence of the Defendant and its sworn statement. There was not a sworn statement responding to that filed by the Defendant but there had been a Reply and Defence to the Counterclaim filed and that document was the subject of discussion at the Directions hearing before the pre-trial conference on 23 October 2024.
8. 	Similarly at paragraph 2(3) Counsel posed the question set out in paragraph 4 on the incorrect premise that a defence to the Counter claim had not be filed. It had been filed on 3 October 2024. Finally at paragraph 2(4) Counsel posed the question about ordering the Commissioner to release the performance bond to meet the Defendants claim for royalties.
9. 	I had the advantage of observing Luther Ahukela in both evidence in chief and in cross examination. I am satisfied that money has been advanced to him and others as set out in the ledger annexed to the sworn statement of Lau Hui Kwong. Luther Ahukela did not dispute that he received advances but said that advances were supposed to be limited to the 5% of the proceeds which he said was provided in the Technology Management Agreement. He did not produce the agreement. On 19 August 2024 the Court had ordered that the sworn statements of list of documents be filed and served by close of business on 13 September 2024.
10. 	At the directions hearing on 19 September 2024, Mr Nimepo confirmed that the only documents the Claimant relied on was already annexed to the sworn statement of Lau Hui Kwong. In spite of a further order to provide discovery given on 19 September 2024 and again on 3 October 2024 the Defendant did not provide any list of documents nor in his sworn statement did he produce the Technology Management Agreement to which he referred. In his counterclaim he sought the following orders: 
	“ 1. An order for payment of royalties as per for shipments from Ohuramo sub-tribe customary land of Tatangi tribal land due to the defendant being the rightful landowner into his Solicitor’s bank account immediately.
	2. Costs of the counterclaim against the Claimant or defendant in the counterclaim on indemnity basis.”
11. 	At paragraph 11 of his sworn statement he set out the following:
	“That I denied all the advances put against me, that totalled valued to $402,417.87 and that most of those claims should be put against the 5% share of Mapo Development Company as agreed in the TA agreement.”
12. 	The allegation by the Defendant is that the Claimant has failed to pay – 
	“royalties of $199,153.14 as outstanding royalties from the shipments from his tribal customary land, plus CDF of $45,901.62 and the5% share of the export for the Licence share as agreed in the TA agreement which is $22,980.81 including the Performance Bond Fee of $250,000.00.”
13. 	He does not say what CDF is. It may be a Community Development Fund. The Defendant has not explained why this is a figure that is payable by the Claimant nor to the Defendant. It may arise from the Felling Licence and may be an amount agreed to be paid by the Claimant in the Technology Management Agreement. Without disclosing or producing the agreement I cannot know whether that is so or not. How the Defendant claims $22,980.00 as a 5% percent share has not been explained especially in light of his acknowledgement that the advances made were advances of his 5% per cent share. The final words “including the Performance Bond Fee of $250,000.00” also do not make sense. The holder of a felling licence is generally required to pay a performance bond of $250,000.00. That is a guarantee to cover unpaid debts to the Government or Provincial Governments and is refundable at the conclusion of a felling operation if all such liabilities have been met. It is not a fee. Why the defendant has added that sum to what he says has not been paid by the Claimant has no sufficient evidential basis. Counsel submits that the $250,000.00 could be used to cover the unpaid royalties. If that is so it would mean getting paid twice as he has made a claim for unpaid royalties. No further evidence has been provided to explain that claim.
14. 	I am clearly of the view that the Defendant is seeking payment from the Claimant while ignoring the advances made to him by the Claimant. The documentation shows that advances were made that can only be advances for future royalties. Those payments include payments to “Timothy Hori”, “Sharon”, “Rex”, “Carolyn”, “Bobby”, “Desmond” and “Ambrose Asu”.
15. 	In addition moneys have been advanced for Canteen Credit, Sea fare, Annual Licence fee – arrears, and the Defendant’s director fee. It is also clear that the Claimant advanced half of the performance bond guarantee.  None of these payments are expenses for the Claimant, they are all to be met by those receiving the royalty payments and the expenses for the felling licence holder. The Claimant has clearly advanced $277,417.87 plus the half share of the Performance Bond, being $125,000.00. The Defendant will be able to recover the Performance Bond if he as licencee complies with all requirements that may be claimed against that fee. In addition he has received advances from as long ago as 2019 and not repaid such sums nor offset them against money due to him.
16. 	He claims he is entitled to the royalties of Ohuramo sub-tribal customary land. If CDF means Community Development Fund, the sum claimed for that purpose being $45,901.62 has not been shown to be payable to the Defendant.
17. 	Assuming the outstanding royalties are the Defendant alleges, $199,153.14 and his 5% per cent fee is $22,980.81 that would make a total amount due to the Defendant of $222,133.95. From the $402,417.87 shown as having been advanced by the Claimant $39,030.00 is said to have been advanced to others, not being the Defendant. He has therefore received $363,387.87. Allowing for the money he claims is due for the payment of royalties and the 5% due as the licence holder he has received $141,253.92 more than that to which he entitled.
18. 	I therefore enter judgment for the Claimant in the sum of $141,253.92.  I draw to the attention of the Commissioner of Forests that the amount claimed by the Defendant to be owing for royalties and his 5% share has been paid to the Defendant by the Claimant. The Commissioner may well consider that the time has come for Technology Management Agreements to limit the use of advances. There may well be landowners who are entitled to royalties from the export of timber, which has been paid by the Claimant to the Defendant.
19. 	The ad hoc advances shown in this case has the potential to result in an unfair distribution of royalties. Those entitled to royalties in this case would need to recover those royalties from the Defendant who already received such payments.
20. 	This is a case where the Defendant’s case had no merit at all. He has claimed that payments were due to be paid by the Claimant when he was the person who had in fact received advances and had failed to meet his obligations. The whole conduct of this case has been an attempt to extract money from the Claimant and to avoid meeting the financial responsibilities he incurred. 
Orders
1.	On the claim there is judgment for the Claimant in the sum of $141,253.92.
2.	On the counter claim there is judgment in favour of Global (SI) Ltd, the defendant in the counterclaim.
3.	The Court alerts the Commissioner of Forests that the judgment sum includes an allowance for what is claimed to be outstanding royalties and the 5% fee for the licence, those sums having already been paid to the Defendant by the Claimant.
4.	This ruling does not make the Defendant liable for advances made to others as shown in the ledger.
5.	The Defendant is to pay the costs of the Claimant on an indemnity basis.
By the Court
Hon. Justice Howard Lawry
Puisne Judge