HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 191 of 2003

CHEUNGS CONSTRUCTION LTD

–V-

KCM PROPERTIES LTD, GUADALCANAL PROVINCIAL ASSEMBLY AND ATTORNEY GENERAL

High Court of Solomon Islands
Muria, CJ

Date of Hearing: 9th October 2003
Date of Judgment: 16th October 2003

B. Upwe for the Plaintiff
R. Kingmele for the 1st Defendant
No appearance for the 2nd Defendant
No appearance for the.3rd Defendant

MURIA, CJ: By its summons filed on 3rd October 2003, the first defendant seeks an order discharging the Order made by this Court on 22nd August 2003 whereby an interim injunction had been issued restraining it from all forms of construction work on the site in Parcel No. 191-023-136 or Lot 130 or Lot 107 (the old Guadalcanal Provincial Headquarter land) until further order of this Court. Included in that order was also the direction that the transcript of the Court proceedings on 21st August 2003 be given to the police for investigation on the allegation of fraud alleged to have been committed by those involved in the transaction and registration process of the land in question. The allegation of fraud or any impropriety is, of course, denied by the first defendant. However, the veracity of that is not of serious importance in this stage. What is essential in this application is to determine if there is any justification for the Order of 22nd August 2003 to be discharged.

The Order of 22nd August 2003

The Order made on 22nd August 2003 was granted following an application by the plaintiff claiming rectification of the lease register in respect of Parcel No. 191-023-136 on the ground of mistake or fraud on the part of the first, second and third defendants. The materials relied upon by the plaintiff were contained in the two affidavits filed on behalf of the plaintiff by Kevin Cheungs on 8th August 2003 and 21st August 2003. The Order is effective until further order from the Court.

Further in the light of the serious allegation of fraud in the land transaction concerned, the Court directed that a copy of the transcript of the proceedings on 21st August 2003 be sent to the Criminal Investigation Department (CID) Police for investigation. Such an investigation does not necessarily form part of the proceedings in this action. The referral has been done as allegations of fraud, a criminal offence, has been made and the police may wish to look into the allegation. However, and whatever action is taken by the police of the allegation is entirely a matter for the police. But I feel it cannot be entirely ignored the fact that the plaintiff was offered by second defendant a lease of Parcel No. 191-023-135 on 14th February 2002 when second defendant knew full well that it had already offered parts of that parcel to other developers. Subsequently the second defendant offered a lease of part of Parcel No. 191-023-136 to the plaintiff, again knowing full well that it had already offered that land to the first defendant. The plaintiff paid $93,000 to the second defendant only to find out that the land in Parcel No. 191-023-136 had been given to the first defendant who also paid the second defendant the sum of $200,000.00. The scenario pictured by the plaintiff of the transactions over Parcel Nos. 191-023-135 and 191-023-136 is further highlighted in the “EXECUTIVE PAPER” on the Study of Lands within the Provincial HQ Area by John Stewart (Principal Lands Officer (GP)) annexed to the affidavit filed on behalf of the first defendant. One thing is clear from Mr Stewart’s analysis of the land transactions in the former Provincial Headquarter, and that is, the plaintiff had paid a total of $93,000.00 to the second defendant but had not been given land for it.

Triable Issues and Balance of Convenience

While the report by the Province’s Principal Lands Officer does not of itself form the basis of fraud as alleged, by the plaintiff, it is in my view an important part of evidence that may be taken into consideration, along with other evidence, in determining the veracity of the allegation made by the plaintiff. The issue of fraud, in the light of the materials before the Court, is clearly a triable issue here.

The first defendant’s contention is that the land in Parcel No. 191-023-136 had already been registered in the first defendant’s name before the offer was made to the plaintiff, and as such the plaintiff has no interest in the land in question. It will, however, be noted that it is part of the plaintiff’s allegation that the date of registration of the lease in the first defendant’s name had been altered or backdated. The plaintiff relied on the alteration of the year “2002” to “2001” with the figure “1” written over “2” in the date of registration. Again, while that may not of itself justify a restraining order against the first defendant, the materials contained in the first defendant’s affidavit of 3rd October 2003 itself lend support to the need to seriously look into the whole transactions leading to the registration of the lease in its name. There is clearly a serious issue to be tried in this case.

It has been suggested by the first defendant that the imposition of the injunction and its continuance would result in the delay of the building construction and heavy monetary loss to it. While such an argument may be taken into account by the Court in determining where the balance of convenience lies, and hence whether the interim injunction should be continued or not, it should not be conclusively in the first defendant’s favour to rely on the argument that the grant of interim injunction or its continuance would jeopardize its business. Additionally, there is also the wider public interest in this case, as in many other cases, to ensure that proper enquiring is done on the conduct by public figures over public property such as the Guadalcanal Province Headquarter land. The balance of convenience would also be in favour of continuing the interim injunction in this case.

Injunction Continued

The materials both filed on behalf of the plaintiff and the first defendant strongly support the need to have the Order of this Court made on 22nd August 2003 continued until further order of this Court.

Future Conduct of the Case

I bear in mind the case of Best Distributors and Services –v- Premier Guadalcanal Province, James Tetea Tuva, Winner Properties Limited and the Registrar of Titlescited by counsel for the first defendant. That case was commenced by Originating Summons like in this case. The plaintiff in that case, however, sought the Court to determine whether the Premier of Guadalcanal Province had the right to forfeit the lease. The Court found there was no power in the Premier to do so on the facts of that case.

The above-mentioned case has also highlighted a somewhat disconcerting picture as to the manner in which transactions had been carried out over lands within the former Guadalcanal Province Headquarter area. I say no more of that at this stage. However, as that casse is closely connected with this case in one respect or another, I feel a copy of the judgment of this Court in that case be also forwarded to the police.

In the present case, the allegations include that of fraud. In such a case, the basis for such an allegation must be pleaded. To do that, the better course of action would be to have the action properly commenced by Writ of Summons. I therefore direct that the action be commenced by Writ of Summons to be issued by the plaintiff and served on the defendants. This would enable the parties to properly plead and defend the allegations raised in this case, in particular that of fraud.

Order:

1.	Application to discharge injunction order granted on 22nd August 2003 is refused. The said order shall continue until further order from this Court.

2.	The action to be commenced by Writ of Summons and allegation, among other things, of fraud be properly pleaded.

3.	Each party to bear its own costs of this application.

Sir John Muria
CHIEF JUSTICE