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Solomon Bauxite Ltd v Commissioner of Lands [2021] SBHC 140; HCSI-CC 204 of 2018 (18 November 2021)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 204 of 2018

BETWEEN
SOLOMON BAUXITE LIMITED
Claimant

AND:

COMMISSIONER OF LANDS
1^st Defendant

AND:

REGISTRAR OF TITTLES
2^nd Defendant

AND:

SUNWAY (SI) LIMITED
3^rd Defendant

Date of Hearing: 28 June 2021 (Supplementary written submission filed)
Date of Decision: 18 November 2021

Mr. Radclyffe for the Claimant
Mr. Banuve, Solicitor General for the 1^st and 2^nd Defendant
Mr. Rano for the 3^rd Defendant/Cross Claimant

Keniapisia; PJ

JUDGMENT

Introduction

1. Commissioner of Lands (“COL”) gave a Grant of Profit (“GOP”) to claimant (Solomon Bauxite Limited – SBL) on 15/06/2017. This followed a surface access agreement COL earlier signed with SBL on 1/09/2014. For reasons of oversight in the COL’s office, the GOP interest was not facilitated for registration on the Perpetual Estate Register of PN 052-009-21 (“PN 21”). Government owns the said Perpetual Estate.
2. Subsequently the COL gave another GOP to 3^rd defendant (“Sunway”) on 6/04/2018. The grant to Sunway was duly registered on the Perpetual Estate Register of PN 21 on 10/04/2018.
3. This dispute came about because SBL discovered the subsequent grant to Sunway. And wished the Court to rectify the grant to Sunway on the ground, of mistake, so that Sunway’s GOP is removed from the register. And SBL’s GOP, which was made first in time, be registered in its place. And further seeks relief from the Court to declare that the claimant is entitled to a GOP to log on PN 21.
4. Simultaneously, Sunway, in its cross claim, seeks reliefs for the Court to declare Sunway’s GOP that was registered on 10/04/2018 to remain unaffected. Sunway further seeks affirmative orders to declare that the surface access agreement (agreement) and GOP it entered into with the COL are valid, because the COL, as agent of the Crown, has power to make the agreement and to execute the GOP. Alternatively, Sunway seeks indemnity under Section 230 of the Land and Titles Act (Cap 133) – the LTA. Alternate remedy will apply if Court cancel Sunway’s registered GOP, under Section 229 (1) and (2) of LTA.
5. In answer to both claims the 1^st and 2^nd defendants defended the Crown to say that neither of the two GOP’s were lawfully executed. That both GOPs were unauthorised, because the COL executed both agreements and GOPs without prior approval of the Lands Board (“LB”), a requirement under the Land and Titles (Amendment) Act 2014 (No. 11 of 2014) – the LTA 2014 Amendment.

Issues

6. The issues were not agreed. But the Court can state the issues early, as follows: -
   • (i) Were both grants (GOPs) and their respective agreements unlawfully executed because both GOPs and their respective agreements were not approved by the LB, prior to execution by the COL, as required in the LTA 2014 Amendment?
   • (ii) Was SBL’s GOP and its respective agreement made prior in time to Sunway’s grant? Should SBL’s grant be declared lawful and hence the register should be rectified to uphold SBL’s GOP over Sunway’s registered GOP, because the LTA 2014 Amendment does not have retrospective effect?
   • (iii) Should the GOP given to SBL and Sunway be rectified or cancelled because it was a mistake that both GOPs and their respective agreements were executed by the COL without prior approval of the LB?
   • (iv) Was the COL an agent of the State? So its execution of the agreement and GOP with Sunway were lawful, under the LTA 2014 Amendment?
   • (v) Is Sunway entitled to indemnity, as an alternative remedy, if its GOP is cancelled?

Court Analysis

7. Claimant’s GOP was made on 15/06/2017, after claimant paid a consideration of $10,000.00 on 4/05/2017. For some unknown reason of omission, the GOP was not registered on the Perpetual Estate (“PE”) register of PN 21. And so the only grant that was registered was the GOP to Sunway, which was registered on 10/04/2018. I found above that this was a subsequent grant, but got registered ahead of the prior grant to SBL.

Both GOP were not approved by the Lands Board - Evidence

8. The evidence^[1] before the Court says that both GOPs and their respective agreements were not approved by the LB, prior to execution by the COL. The COL is the Secretary to the LB. Secretary is the main action man behind the powers, functions, decisions, statutory obligations and duties of the LB. In his evidence, COL Mr. McNeil says the LB did not approve both GOPs and their respective agreements. And that evidence cannot and was not damaged in any material way. The GOP to SBL was made on 15/06/2017, but not registered on the PE register of PN 21. This was about 3 years after the LTA 2014 Amendment came into force in December 2014. The GOP to Sunway was registered on the PE register of PN 21 on 10/04/2018. This was about 4 years after the LTA 2014 Amendment came into force in December 2014. The COL unilaterally executed both GOPs and their respective agreements, as the undisputed evidence by the COL showed.

The law – The LTA 2014 Amendment - purpose

9. The objective of the LTA 2014 Amendment was to remove the monopoly administrative powers and functions that were formerly vested in the sole hands of the COL and the Minister under the repealed LTA and to vest the same in the LB. This was seen as a necessary legislative intervention, because the COL and Minister yielded too much administrative powers and functions over government interests in land. The amendment came into force on 1/12/2014. Essentially the amendment meant that the LB was established to become the main bouncing stage for all administrative powers, functions and decisions relating to government interests in land. The amendment lowered the COL’s former administrative functions and powers to mere implementer of the LB decisions. The COL sits as Secretary to the LB. Under the amendment, it would be fair to say that the COL’s hands were cushioned to an implementer for the LB decision. Where the LB gives clear directives or delegation of duty, then the COL can only act pursuant to the LB’s delegation of powers/duties/functions. Unlike before where the COL has the sole administrative functions and powers to administer and decide on government interests in land. This is why Section 4 of the repealed LTA was removed. So that under the LTA 2014 Amendment, those administrative powers and functions formerly vested in the COL were now vested in the LB.
10. And then a new Part II A of the LTA 2014 Amendment – established a LB and its powers and functions. The object of the new Part II A amendment is stated in a new Section 8A as follows “The object of this Act is to establish a land board and to confer on it all powers and functions relating to the allocation of interest in land, development of land and to ensure that the administration of land is carried out in a fair, transparent and equitable manner to meet the needs and welfare of the people of Solomon Islands”.
11. And then the powers of the LB are stipulated in Section 8 (C) (1) (a) – (i) of the LTA 2014 Amendment. I will focus on the powers relevant to the case at hand. The board shall have power to allocate interests in any land in accordance with the provision of the Act and to approve any method of allocation of land and the terms and conditions to be applied – Section 8 (C) (1) (a) and (b). When allocating, the COL can only act under clear written directives from the board – Section 8 (C) (4) read in conjunction with Section 8 (C) (6). It means the LB will decide on allocation and can direct in writing, to the COL to implement its decision on the allocation. Applied to this case, the LB should have decided on the GOP and their respective agreements (allocation of interests in land) as well as the terms and conditions of the allocation. And then the COL may on the Board’s written instructions execute the GOP with either SBL and or Sunway.
12. That did not happen. For the evidence shows that the COL acted unilaterally to allocate the GOP interest as well as the terms and conditions of the GOP, to both SBL and Sunway in 2017 and 2018 respectively. Solicitor General submitted it was mistake in law for the COL to act without clear authority, directive or delegation from the board, in executing the GOP to both SBL and Sunway. Any actions by the COL must be preceded by prior approval of the LB, the Solicitor General submitted. Accordingly, the GOP registered in the name of Sunway should be cancelled or rectified under Section 229 (1) and (2) of the LTA. For the same reason, the GOP to SBL should be cancelled and not registered at all. I will uphold the submissions by the Solicitor General, because there is no evidence that COL acted with authority of the board, when by law, the COL was obliged to. It was a mistake in law and fact.

The COL as agent of the board has power give the GOP

13. The mistake cannot become proper by agency arguments advanced by Mr. Rano for Sunway. Mr Rano argued that the COL as an agent of the board and the crown has authority to hold and deal with interests in land and to execute any instrument relating to interests in the land (See paragraphs 6 - 11 of Mr Rano’s written submissions filed 18/11/2020). The flaw with those arguments was that the COL became an implementer and not the administrator or decision maker to deal with interests in land for the government. Only the board has power to administer and decide on allocation and approval of government interests in land (GOP included). We have gone from the period of history when a single person was the administrator and decision maker of government interests in land. We are now living in an era where the legislature had seen fit that government interests in land be now governed by a Board for and on behalf of the government and people of Solomon Islands. This was seen by Parliament to be a fair, transparent and equitable manner, of administering and managing government interests in land, to meet the needs and welfare of the people of Solomon Islands. To my mind, Parliament was saying in 2014, the COL became too powerful as the sole administrator of land. And his/her dealings in land for and on behalf of the government was not fair, transparent and equitable. So Parliament saw it fit to give the sole administrative power and function to the board. The COL became Secretary to the board, to implement board decisions on government interests in land allocations and approvals.

Is the COL bound by the surface access agreement to give the GOP?

14. The GOP to SBL is preceded by a surface access agreement between SBL and COL. Counsel Radclyffe submitted that the agreement obliged the COL to give SBL the GOP without the approval of the LB. To that extent the surface access agreement will become unlawful under the LTA as discussed above, in paragraphs 9 - 12. One cannot have an agreement the effect of which is to circumvent the law. The COL cannot act in 2017 to give effect to the agreement (made in 2014) because in 2017 the COL no longer owns the GOP. In other words, the COL does not have a GOP in 2017 and so it cannot lawfully give the GOP to SBL, even though the agreement it has with SBL was made in 2014 prior to the coming into force of the LTA 2014 Amendment. For the same reasons any agreement the COL had with Sunway will also become unlawful.

Is Sunway entitled to indemnity against the government under Section 230 of the LTA?

15. Sunway (Cross Claimant) also claim for indemnity under Section 230 of the LTA against the 1^st and 2^nd defendants in the cross claim as an alternate remedy. Mr. Rano submitted that Sunway is entitled to indemnity if its registered GOP is cancelled by the Court. I am grateful for further supplementary submissions from Mr Rano and especially, Mr. Radclyffe, because the latter was not obliged to make further submissions except that counsel was just courteously assisting the Court.
16. I will reject the alternate claim under Section 230 (2) (a) of the LTA. Sunway is disentitled from the benefit of indemnity because Sunway had caused or substantially contributed to the mistake by the COL, through its own negligence. Sunway is a company and is expected to be aware of what was happening with important commercial undertaking legislations. Sunway as a company has the resources to ensure the commercial decisions it ventured into are lawful. Sunway cannot plead ignorance of the law as an excuse. In 2014 a major legislative reform was made to the LTA making powerless the formerly powerful COL. Every one, more so professionals (companies included) is expected to know what the changes to the LTA were in 2014 and how the changes affect the powers of the COL, in the allocation of government interests in land. Sunway did not know about that by its own negligence to seek prior professional advice, before making an important commercial venture, with the wrong person (COL).

Conclusion and Orders

17. The law and the evidence as I found on above, clearly shows that the COL made a mistake in law (lack of power) when he granted the GOP to SBL and Sunway in 2017 and 2018, respectively. For that mistake, this Court has power to cancel or rectify under Section 229 (1) and (2) of the LTA. I will therefore cancel the two GOPs. I will also order that the consideration the two parties paid for the GOPs be refunded. I will award cost to 1^st and 2^nd defendants against SBL and Sunway (cross claimant). Sunway is not entitled to further indemnity under Section 230 of the LTA. I will answer the issues I posed for trial as follow: -
    • (i) Both grants (GOP) and their respective agreements were unlawfully executed because both GOPs and their respective agreements were not approved by the LB, prior to execution by the COL, as required by the LTA 2014 Amendment.
    • (ii) Claimant’s GOP was made prior in time to 3^rd defendant’s grant. But cannot be declared lawful and hence the register should not be rectified to uphold claimant’s GOP over 3^rd defendant’s registered GOP.
    • (iii) The GOP given to SBL and Sunway will be cancelled because it was a mistake that both GOPs and their respective agreements were executed by the COL without prior approval of the LB.
    • (iv) The COL is the Secretary to the LB, and not an agent. So the COL can only lawfully act under clear written directions of the board. And so its execution of the agreement and GOP with Sunway was not lawful, under the LTA 2014 Amendment.
    • (v) Sunway is not entitled to indemnity under Section 230 (2) of the LTA.

THE COURT
JUSTICE JOHN A KENIAPISIA
PUISNE JUDGE

^[1] Sworn statement of Allan McNeil filed on 4/07/2014.