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HHD Development Ltd v Panuga [2019] SBHC 29; HCSI-CC 85 of 2018 (18 April 2019)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case Number 85 of 2018

HHD DEVELOPMENT LIMITED
Claimant

V

POLYN PANUGA, DOROTHY LAURA, CASTRO TINGIIA, ISOM FIRISI, JOYE TAPUIKA, PATTSON PENENA, JOHN NAILYN TESUATAI, EDDIE SEWEA, LOVELY CIRIST, WALTA WAHGI, RENOSI WAHGI, GEORGE OBETA, JOHN BUNGA, ATABAN MEEKE, STEVEN FAMAEA, RECHAEL SUMBU, TOMAS RABAWA, ERICA OSPOLO, NESARI KIUSOGHA, JIMMY SILU, NATHANIEL BOLIKO, AGUESTINE, NANGI, SEGANA JERUS PITAKIA, SALOME SANDA, JUNIOR KESO, HILDA SANDA STEVEN DAMOLI, WENDY OPOLILU, TERESSA TAO
First Defendants

Date of Hearing: 20 March 2019
Date of Ruling: 18 April 2019

Mr. J Duddley for the Applicants (2 Named Defendants only)
Mr. W Rano for the Respondent/Claimant

RULING ON APPLICATION TO SET ASIDE DEFAULT JUDGMENT

1. Claimant seek eviction orders, damages for mesne profit and permanent injunction against 29 or 30 individual defendants, who are allegedly trespassing on its property, PN 192 – 004 – 379, Lot 199 (“PN 379”). Claimant obtained default judgment perfected 30/07/2018, following a claim filed on 27/03/2018.
2. By application to set aside default judgment filed 14/09/2018, two of the defendants (namely: Mr. Isom Firisi and Mr. Castro Tingila) seek out to set aside the default judgment. Majority of the defendants are not challenging the default judgment.
3. Counsel Duddley for the two (2) named defendants (“defendants”) submitted that the claim was not properly served on them, because it was served without a “Response Form”. Counsel cited a precedent, in which I ruled that a claim served without a “Response Form” is invalid service^[1]. Whilst that is good law, I shall draw a distinction. That case, the claim was invalidly served on the defendants (without a Response Form). There were only 4 defendants. And the 4 defendants denied service. Here the claim was served on 29 or 30 individual defendants. And only 2 defendants are coming to challenge service. Not majority of the defendants. So I would rule that there was valid service. And on lateness, any defence by the 2 defendants can be given an extended time for filing, subject to my finding on meritorious defence or arguable defence.
4. Draft defence^[2] pleaded that PN 379 is one of the resultant sub-divided plots from the original PN 192 – 004 – 68; a sub-division that occurred in 1999. Draft defence continue to plead that the original owner of PN 192 – 004 – 68 was Levers Solomons Ltd. Levers then transferred the said land to Pacific Seg Ltd. Then applicants/defendants pleaded that there was a contract to share PN 192 – 004 – 68 between Pacific Seg Ltd and SOMMA or Solomon Sunaone Mamaloni (SSM) – proprietor of SOMMA Company. Contract to share the property failed by the time SSM died in 1999. And then the sub-divided plot PN 379 (one of the resulting sub-divided plots) was later registered in claimant’s name – a fact defendants admitted to in paragraph 1 of statement of case, of draft defence. From the draft defence, it appeared that the contract to share the original PN 192 – 004 – 68 between Pacific Seg Ltd and SOMMA failed. And Pacific Seg Ltd took sole ownership of the whole original plot. Later Pacific Seg Ltd sub-divided it and sold out the sub-divided plots – where claimant is the current owner of one of the sub-divided plots (PN 379) – the disputed plot herein.
5. Defendants plead in draft defence, that had the contract to share PN 192 – 004 – 68 between Pacific Seg Ltd and SOMMA succeeded, the land now registered solely in the claimant’s name, would have been registered in SOMMA’s name. And defendants would benefit, because they have some form of relationship to SOMMA or SSM. When I asked counsel what kind of relationship, the relationship counsel conveyed fell short of directors or shareholders of SOMMA. Defendants may have been employees of SOMMA. Defendants’ alleged Pacific Seg Ltd sale to claimant, was wrong as it was made to exclude SOMMA’s equitable interest.
6. Defendants “claim of rights” are not tenable in law. Defendants do not claim any direct and superior rights over PN 379 against claimant; who holds an indefeasible title. Defendants claim some kind of inferior rights traceable to SSM/SOMMA. But those rights have extinguished because the SSM/SOMMA interests were not registered by the time SSM died in 1999. This is about 20 years ago. Defendants faced a further hurdle. If there was any valid contract between SOMMA and Pacific Seg Ltd – then defendants are not privy to that contract. So they cannot claim for any rights accruing from any such contract. They lacked standing to such alleged contract.
7. Defendants cannot make a “superior rights claims” against the claimant relying on a contract they were not party to. Defendants may only claim superior rights against the claimant directly. But they have not pleaded such “direct rights claim”. Being strangers to any contract between SOMMA and Pacific Seg Ltd or Levers Solomons Ltd (if any), defendants cannot claim any right in a contract, they were not privy to. This is a simple principle of contract law that needs no further amplification. Defendants have no standing. Consequently their defence has raised no triable issue. There is no tenable cause of action because, lacking standing means the defendants cannot make any viable defence on merit; on the basis of privity of contract^[3] principle.
8. Even the companies defendants talked about in their draft defence may be ghost companies. I take judicial notice of a print out of the status of “SOMA” from solomonbusinessregistry website, tendered by Mr. Rano. Counsel Duddley say correct spelling is “SOMMA” not “SOMA”. I asked Mr. Duddley to furnish any print out copy that will show to me that “SOMMA” is still alive. Counsel furnished to me a letter from the Registrar of Companies. I take judicial notice of that letter which confirms that “SOMMA” is not in existence, because it has been deregistered and not re-registered. I find that “SOMMA” is a ghost company. Even if I were to find that “SOMMA” is still in existence; I would still conclude that defendants “lacked standing” because they have not shown to me either in pleadings or evidence, that they are directors or shareholders of “SOMMA”. Defendants draft defence goes back to the original plot. Original plot has ceased under sub-divisions made in 1999. One of the sub-divided plots is PN 379. Claimant is the owner of PN 379. To have a viable defence, defendants must plead that transfer of PN 379 from Pacific Seg Ltd to HHD Development Ltd is defective, under Torren’s system. Defendants have not pleaded so. Register is conclusive evidence of ownership under the Torrens system. It is a system of ownership by registration.
9. Accordingly; defendants’ application to set a side default judgment is declined. Parties meet their own costs.

THE COURT
JUSTICE JOHN. A KENIAPISIA
PUISNE JUDGE

^[1] Davies Filoisi v Sunaoni and Others [2016] Unreported decision delivered on 24^th August 2018.
^[2] Reference to “draft defense” also included the counter claim.
^[3] Parties under a contract are entitled to sue each other but prevents a third party from doing so.