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Bird v Valahoana Company Integrated Development [2009] SBHC 27; HCSI-CC 387 of 2004 (24 July 2009)

HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 387 of 2004

BETWEEN:

BRIAN BIRD (Representing his Mbuleani Community)
1st Claimant

AND:

ALISTAIR ALEVE (Representing his Cheara Community)
2nd Claimant

AND:

VALAHOANA COMPANY INTERGRATED DEVELOPMENT
Defendant

Mwanesalua J

Date of Hearing: 17, 18 June and 10 July 2009
Date of Judgment: 24 July 2009

Mr Radclyffe for the Claimant
Mr M Pitakaka for the Defendant

JUDGMENT

Mwanesalua J:

1 Mr Brian Bird is a member of the Mbuleani Community and Mr Alister Aleve is a member of the Cheara Community. These communities live at Marovo, in the Western Province. Valahoana Company Integrated Development (VCID) is owned by Joseph Aleve, Alwin Pitu, Samuel Alotoni and Kimo Lilivae. VCID carrries on logging business on Vangunu Island. Both Mr Bird and Mr Aleve sue VCID in representative capacity on behalf of themselves and their communities for alleged breach of contract.

2 Kalikosoani tribe owns customary land on Vangunu Island. This tribe established a project known as the Kalikosoani Integrated Development Project to develop their land on Vangunu. The aim of this project is to use tribal land and forest resources to derive income in order to improve village standard of living, basic services and infrastructure for its people, which include landowners and non landowners who reside within the vicinity of the project. The development activities of the project include the export of round logs and milled timbers; building roads in the concession area; setting up of community development funds and land trust boards; and assisting non land-owning communities living within the area of the project. VCID is a vital part of this project. Its functions are to pull together landowners’ resources and interests for purposes of development; to represent and negotiate on behalf of landowners on how best other resources can be fully used; and to facilitate and arrange with relevant authorities to fell logs and mill timber for export. That all royalties due to landowners trustees for trees harvested from their land are to be paid directly to their respective land trust boards, for among other things, distribution to their members.

3 Mr Bird and Mr Aleve’s case is that, an oral agreement was made between VCID and them in June 2004 after the standard logging agreement (SLA) was signed between the trustees/representatives of landowners and VCID on 3 September 2003[1]. They assert that the 10% royalty due to landowners under the SLA was varied by an oral agreement in June 2004. They say that under this agreement the 10% royalty would now be divided into three equal shares, and that a one-third (1/3) of these three shares is to be paid to Mr Bird and Mr Aleve’s communities. They went on to claim that the payment of $105,300.00 to their communities in June 2004 was made in accordance with the terms of that oral agreement. That such payment would be paid to their communities each time a shipment of logs took place. But no further payments were made after the $105,300.00 was paid to them so that they sue VCID for, among other things, damages for breach of contract.

4 On the contrary, VCID denies ever making such an oral agreement with Mr Bird and Mr Aleve. It contends that the payment made to Mr Bird and Mr Aleve’s communities in June was not done in relation to royalty for logs felled on their tribal customary land, but was solely made in accordance with Kalikosoani tribe’s initiatives, among other things, to share benefits communally with members of the communities living within the area covered by the logging operation.

5 The issue before the Court is whether Mr Bird and Mr Aleve made an oral agreement with VCID in June 2004.

6 The evidence of Mr Bird is that prior to this oral agreement, he prepared a paper[2] containing points for discussion with the management of VCID. The points for discussion on that paper include the position of land trustees and directors of VCID; the validity of the land trustees and the directors’ appointments; and VCID’s transparency and accountability on its plans; goals; objectives; articles of association; community projects; financial position and recommendations. He did not discuss these points with VCID himself, but gave the paper to Mr Aleve so that he could pass it to the management of VCID in Honiara. Mr Aleve’s evidence is that he took the paper with him to Honiara in June 2004 and gave it the management of VCID. He then raised the payment of royalties with Mr Joseph Aleve, Mr Hiva and Mr Hape in a meeting with them. He says that during that meeting, it was agreed that the 10% royalty due under the SLA would from there on be divided into three equal shares. A one-third share would be paid to Mbuleani and Cheara communities, while other two communities would be paid a one-third share each. He told Mr Bird about these pay arrangements when he returned home with the Mbuleani and Cheara communities share. Mr Joseph Aleve agreed that he received the discussion paper from Mr Aleve but denied making any oral agreement about the payment of the 10% royalty in three equal shares. Mr Hape denied discussing the sharing of the 10% royalty and making any agreement regarding its payment with Mr Aleve.

7 There were concerns about the delay of payment of royalty in 2004[3]. But Joseph Aleve says that the delay was partly due to huge advances made against royalties by certain communities and individuals living within the vicinity of the logging operation. This was correct[4]. Mr Bird based his right to royalty under the SLA and not from trees harvested on his tribal land. He was a director and a land trustee under SLA. But no conditions of service were provided for persons appointed to serve in those positions. So any benefits to be derived while serving in the position of a land trustee would have to be made from royalties payable to land trust boards on whose trees were logged, as set out in the Kalikosoani Land Integrated Development Project document, where it says "All royalties required to be paid to trustees will be paid in total amount as of each land areas to their respective Land Trust Boards. It is the respective Land Trust Board’s responsibility to distribute royalties among landowners, communities and families, etc"[5]. But persons whose lands were not logged as yet but reside within VCID’s concession areas may still get royalties subject to the initiative of the Kalikosoani tribe as set out in the project document where it stated, that one of its activities is to "Assist other communities in the vicinity of the operation"[6]. Mr Aleve’s evidence is that he never made any advance against royalties. But according to record, he got an advance of $35,000.00[7]. Mr Bird merely heard about the alleged oral agreement from Mr Leve. It is necessary to bear in mind that at the time this oral contract was purportedly made, the logging operation was merely concentrated on Kalikosoani customary land. Why would members of that tribe with many commitments have equal share of the 10% royalty with non-landowners whose trees were not harvested like Mr Bird and Mr Aleve. This Court is unable to accept Mr Aleve’s evidence regarding the alleged oral agreement advanced by himself and Mr Bird to support their claim. It lacks realism and ring of truth. Because of that, this Court is unable to come to a conclusion as to the balance of probability in favour of Mr Bird and Mr Aleve. Mr Bird and Mr Aleve have not proved their claim on the balance of probabilities as required in Civil Cases. The Court will therefore dismiss their claim.

Orders of the Court

1. The Claim is dismissed.
   
2. Mr Bird and Mr Aleve are to pay VCID’s costs in this claim.
   

BY THE COURT

^[1] Exhibit A
^[2] Exhibit 5
^[3] Exhibit 6 to 9 and 11
^[4] Exhibit 10 to 13
^[5] Kalikosoani Land Intergrated Development Project - Exhibit 24
^[6] Ibid paragraph 3.3
^[7] Exhibit 14.