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Chago v Success Co Ltd [2024] SBHC 149; HCSI-CC 366 of 2019 (1 October 2024)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 366 of 2019

BETWEEN

MARIO CHAGO AND ANDREW TURA
First Claimant

AND:

KOMARINDS RESOURCES LIMITED
Second Claimant

AND:

SUCCESS COMPANY LIMITED
First Defendant

AND:

SOLOMON RESOURCES MANAGEMENT LIMITED
Second Defendant

Date of Hearing: 10 September 2024
Date of Ruling: 1 October 2024

Mr. J. Sullivan KC for both Claimants
Mr. G. Suri for the both Defendant

RULING ON APPLICATION FOR DECLARATION PURSUANT TO RULE 7.39

Faukona DCJ,

1. A claim was filed by the Claimants on 20^th June 2019. The major reliefs sought are damages for trespass and conversion, including exemplary damages and/or aggravated damages and with interest.
2. Premise on the claim being filed, the claimants also filed an ex-parte application on 20^th June 2019, which was granted and perfected on 25^th June 2019.
3. A defence and counter claim was filed by the Defendants on 17^th July 2019 and amended on 24^th October 2019.
4. By normal and acceptable practice an inter-parte hearing should be conducted immediately after the defence was filed. However, in the current case the circumstances did defer, that inter-parte hearing cannot be conducted until the conditions attached to the ex-parte orders have been fulfilled. When that could be, depend entirely on how soon the parties had concluded their obligations.
5. Apparently, it may seem, the obligations under those orders were less important in nature, hence not complied with accordingly.
6. Instead the Defendants opted to file an amended application on 22^nd October 2020 to determine preliminary issues which was heard on 30^th January 2023, and a ruling delivered on 3^rd August 2023.
7. Against that ruling the Defendants had filed notice of appeal on 23^rd August 2023. That appeal had been heard and ruling is anticipated in the nest sitting of the Court of Appeal.
8. Whilst contemplating the result of the appeal the Defendants then filed this application for declaratory orders pursuant to Rule 7.39 on 22^nd September 2023.
9. The major relief sought in the application is to discharge or very the injunctive ex-parte orders.

The substance of the application.

10. The application was brought on the basis of r. 7.39.
11. The other reasons are that orders 2, 3, 4 and 5 of the ex-parte injunction orders were not complied with, and orders 6 and 8 are dependent upon performance of orders 2, 3, and 5.
12. The other reasons are that both defendants had ceased logging operation in the land soon after the injunctive orders were granted. Such ceasure had affected the engagement of second defendant to carry out logging operations as a contractor.
13. As deposed, the 1^st Defendant had closed down logging activities in 2019 and had suspended the operation manager on 7^th December 2022 and paid off all staff in July 2023.
14. That the records of logging in the land and because of the ceasure of operation it is difficult to retrieve them.
15. Therefore, orders number 3, 4, 5 and even 6 were not complied with. It does not end there. Orders 7 and 8 were not complied with as well. It is obvious all the injunction orders lie at the feet of the defendants.

Application of R. 7.39.

16. The Counsel for the defendants utilizes the above rule in an attempt to discharge or vary the existing of the injunctive orders, under the circumstances that they are now 5 years old, and that non-compliance with them is even practically difficult, therefore it is appropriate to discharge or very. To vary an order or set of orders, it is necessary for the applicant to provide or propose an alternative to assist the Court to consider. In this case no proposal is supplied and the Court cannot invoke its power to exercise its discretion in a vacuum.
17. The Counsel for the Claimants has a different opinion in the interpretation of R. 7.39. That the obvious purpose of r.7.39. is to provide interlocutory declaratory relief where interlocutory injunctive relief is not available or not appropriate.
18. One fine example is that r.7.38 relates to interlocutory injunction which are not available against the Crown, but against which declaratory relief is available in lieu. S.18 (1) of Crown Proceedings Act specifically provided that in any proceeding against the Crown, the Court shall not grant an injunction or make an order for specific performance but may in lieu thereof make an order declaring the rights of the parties.
19. Therefore r.7.39 is not an appropriate basis for the relief sought, namely to seek declarations as to the meaning of a court order made under r. 738, and to seek a variation or discharge of an injunction made under that rule.
20. Obviously, r. 7.38 concerns about interlocutory orders in terms of injunction, and r.7.39 is in respect of interim declaration by an interlocutory order. The grant of both orders under the rules merits the exercise of discretion by the Court as it thinks just and convenient.
21. One cannot realize the full purpose of r.7.39 unless one reads s.19 of the Crown Proceedings Act, as one area of law which r. 7.39 applies. Only then one can conclude that both rules applies to two different circumstances.
22. I am more than convinced that this application was brought under a wrong rule and cannot form any legal basis to invoke the discretionary power of this Court to make a decision.
23. Further arguments by the Counsel for the defendants relying on the words as “just” and convenient”, which are expressed by the two rules, as foundation that will attribute to any determination. Whilst I would accept r.7.39 carries the same expression as in r. 7.38, but are for different purposes and not to seek variation or discharge of an injunction made under r. 7. 38.
24. Even with the existence of the circumstances as alleged by the Counsel, r7.39 still cannot apply.

The actual status of the injunction orders.

25. The injunction orders comprise of two parts. The first is the primary injunctive relief which restraints the defendants from entering PN.203-003-1.
26. However, the reasons give, in my respectable view are unreasonable and cannot be accepted, viewing from the perspective of immediate actions taken by the second defendant to cease logging operation and the suspension of first defendant after the injunctive orders were served and cease engagement of the second defendant at the same time makes one marvels.
27. In my opinion I could verily draw inferences that what was done by the defendants concertedly was purely to evade the operative of the orders. If logging operation was suspended and ceased, and the contract had been terminated immediately after the orders were served, and no inter-parte hearing was done, why waited until 22^nd September 2023 before filing of this application to very or discharge the orders. Why waited for 4½ years.
28. As parties mostly affected by the orders, is expected to be conscious responsive in ensuring an inter-parte hearing was conducted as soon as possible.
29. This failure and the immediate action taken by the defendants to cease operation and termination of the contract, is a sure falsity to derail the orders of the Court. To cry foul because of the disintegration of the defendants, making it impossible to comply with the orders, is again another unimpressive submission which I cannot accept.
30. Counsel for the claimant produces Form 13 Annual Return of the second defendant company up to 2024. The document clearly exposes that the second defendant still engage in Forestry as a main business sector, and yet Mr. Suri submits the second defendant no longer carries logging operations anywhere also. Certainly, the defendants have a game to play and so far, have misled the Court which I must not accept. The second defendant remain registered and active as it regularly files annual returns.
31. It is noted order 2 specifically affirmed that all or some logs felled were still remaining in the land, and so a joint survey activity was necessary to verify, identify all species and volume.
32. On the date of hearing of this application there was no log remain on the land. The Counsel for the Claimants have removed those logs but is silent about it.
33. In any event, I am able to conclude that the defendants took advantage of order 5 to remove and exported the logs without complying with the second part of the order or with paragraphs 3, 4, 6 or 8.
34. Apparently, it appears the defendants” non-compliance with the ancillary orders were culminated in the reasons I have stated above. However, Mr. Dettke admits the contractual relationship and acknowledges they were acting under the first Defendant’s license. If it does, then the first defendant controls the second defendant to ensure compliance.
35. Indeed, there was nothing done and the obligations under the orders were not been complied with.
36. In regards to survey the Claimants have under taken and brought to Courts attention of three separate report, none of which have been disputed. There was nothing at all from the Defendants. Therefore, I must rely on those materials before me.

Principles for grant of interlocutory injunctions.

37. It is noted any injunctive orders are temporary and normally granted under the discretionary power of the Court. See r.7.11 and r. 7.38.
38. Rule 7.11 clearly states the Court may grant an order if it is satisfied that the applicant has a serious questioned to be tried, and the balance of convenience favors the making of the order.
39. The same principles were entrenched as a legal requirement in the famous case of American Cyanamid v Ethicon Limited^[1].
40. Those principles were considered at that time of the application, resulting in the grant of the injunction orders. The question now is whether there are peculiar circumstances available in order for the orders to be varied or discharged.
41. The applicants now treated the orders as stale because they have been in existence for more than 5 years; which supposed to be temporary.
42. The applicants have pointed out change of circumstances which should render the orders stale. I have dealt with those in the above paragraphs.

Should injunctions be maintain.

43. The reasons for the maintenance of the injunctive orders have been narrated above. However, the crux of this case is that there are serious issues to be tried. The defendants are disputing the ownership and the registered land boundaries clear from the preliminary issues, that there are serious issues of both fact and law.
44. Obviously, from the above discussions, the application is an abuse of process. The defendants who were affected should have called for an early inter-parte hearing, rather than waited for more than 4 years, which they chose not to prosecute until now.
45. The change of circumstance the defendants rely on which render compliance difficult, were circumstances caused by themselves to escape the orders. They are not merely complying with the orders but they had breached them as well.
46. Therefore, the balance of convenience favors the claimants as just in the circumstances of this case. To discharge the injunction could permit the defendants to re-enter and log on the registered land which they are not registered owners.
47. Therefore the application for declaratory orders pursuant to r.7.39 is hereby dismissed.

Orders.

1. The application by the defendants for declarations pursuant to r.7.39 is hereby dismissed.
2. Because of the conduct of the first defendant, cost is hereby granted against both defendants on indemnity basis to be assessed if not agreed upon, with certification for King’s Counsel.

The Court.
Rex Faukona.
DEPUTY CHIEF JUSTICE.

^[1][1975] UKHL.