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Maison du Vanuatu v Vanuatu Commodities Marketing Board [2007] VUSC 22; Civil Case 216 of 2006 (29 March 2007)

IN THE SUPREME COURT
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No.216 of 2006

BETWEEN:

MAISON DU VANUATU
Claimant

AND:

VANUATU COMMODITIES MARKETING BOARD
First Defendant

AND:

VANUATU COPRA & CACAO EXPORTERS LIMITED
Second Defendant

AND:

LAURATA KAVA GROWERS ASSOCIATION
Third Defendant

Coram: Justice H. Bulu

Counsels: Mr. Bill Bani for the Claimant
Mrs. Heather L. Leo for the Defendant – no appearance
Mr. Daniel Yawah for the Second & Third Defendants

Date of Hearing: 27 March 2007
Date of Decision: 29 March 2007

DECISION ON URGENT INTERLOCUTORY APPLICATION

1. On 22 March 2007 at 3.00 p.m. Mr. Bill Bani, on behalf of the Claimant made an urgent interlocutory application seeking the Court’s approval to order VCMB to “immediately withhold or suspend all export authorities for export of prescribed kava product to New Caledonia.” The Application could not be heard on 26 March due to the non-appearance of VCMB and was eventually heard at about 4.30 p.m. on 27 March 2007.
   
2. The following grounds were advanced by the Applicant in support of the Application.
   

(a) By virtue of section 7 (f) of the Vanuatu Commodities Marketing Board Act, VCMB has the statutory power to withhold a written authority or export licence.

(b) The Applicant’s claim for damages against VCMB for breach of contract increases with all shipment of kava to New Caledonia to a destination, other than Maison du Vanuatu, yet VCMB has taken no reasonable step to minimize the losses against it.

(c) That MV Havanah will be arriving in Port Vila next week and it is expected that exporters who have been issued with export licence by the VCMB will load several tones of kava bound for New Caledonia as has been done in the past.

(d) If this order is not issued, the Claimant/Applicant will be greatly prejudiced and seriously disadvantaged to such an extent that its distribution center in New Caledonia will not be able to sell the stock it has for the next three months and this will consequently result in the closure of its operations as well as further increased claims for damages against VCMB.

(e) There is sufficient evidence to suggest that VCMB is acting in very bad faith as a statutory arm of the Government by luring the Claimant to enter into a signed agreement; receiving VT5,000,000 from the Claimant; then unreasonably refusing to perform its part of the deal therefore the Court must step in to maintain the status quo until determination of this matter in Court.

3. The Application is made pursuant to part 9 of the Civil Procedure Rules.
   
4. VCMB in reply contended:-
   

(a) One way to withhold or suspend licences issued for the export of kava to entities, other than Maison du Vanuatu, in New Caledonia is if the Agreement needs ministerial consent before it comes into effect.

(b) The life of a licence is one year. However, licences granted for the year 2007 are temporary in nature pending the outcome of the proceedings. Each licence is issued for a month only. It is best to leave the temporary licences in place as they last for only a month.

(c) There is a lot of political interference in the management and operation of VCMB. VCMB is controlled in a big way by the Government. It is in the best interest of VCMB if exports to New Caledonia goes to Maison du Vanuatu only.

5. Mr. Yawah, on behalf of the Second and Third Defendants contends as follows:-
   

(a) They object strongly to the Application. That this is basically the same application that has already been rejected by this Court. Once a licence is issued it remains a life and valid licence for its term.

(b) The Second and Third Defendants have an open licence, that is to export kava to New Caledonia and not restricted to Maison du Vanuatu alone.

6. Maison du Vanuatu has applied for basically the same orders in the past and the Court rejected the Application.
   
7. Under Part 7 of the Civil Procedure Rules an interlocutory order may be granted if the Court is satisfied:-
   

(a) The Applicant has a serious question to be tried; and

(b) The Applicant would be seriously disadvantaged if the order is not made.

8. The background to this Application, is that on 7 October 2006 an Agreement was entered into between VCMB and Maison du Vanuatu. Clause 10 of that Agreement provides that the Agreement shall come into force on the date of signature of both parties thereto. Both parties did sign that Agreement on 7 October 2006.
   
9. VCMB now claims that, despite the signing of the Agreement on 7 October 2006 and clause 10 of the Agreement the Agreement can only start to operate once approved by the Minister of Trade. Whether the Agreement came into force on 7 October 2006 is an issue to be determined in the proceedings concerning the legality of the Agreement.
   
10. Since the beginning of this year VCMB has gone ahead and granted new licences. Mrs. Leo had informed the Court on behalf of VCMB, that such license are being issued with the life span of one month only. However, evidence before the Court from the secretary of the VCMB Board shows that the licences are in fact issued for 6 months in relation to export of kava to Nouméa. Not for one month. Such licences are, in my view granted pursuant to the powers vested in VCMB by section 7 of the VCMB Act.
    
11. The licensees are bona fide customers. They have done nothing wrong. The claim is against VCMB. The Claimant claims that with each export of kava to Nouméa that goes else where, not to Maison du Vanuatu, its loses are increasing.
    
12. The issue that this Court will have to determine and determine positively for the Application to be successful is whether the tests in part 9 of the Civil Procedure Rules referred to in paragraph 6 above is applicable in the circumstances of this case. Why should the licencees have their licences suspended or put on hold when they have not done anything wrong. They are pursuing their businesses of exportation of kava to New Caledonia under lawful export licences that have been granted.
    
13. It is my view, that the Applicant has a serious question to be tried, and that question is whether it has a valid Agreement and in force. And that issue is before the Court for a decision in the other proceeding. On the second limp of the test that is that the Applicant is seriously disadvantaged, that could be so, if the Court agrees or holds that the Agreement is valid and in force.
    
14. Rule 7.5 (3) provides that the Court “may” make the order if the two tests are met. In my view, that creates a discretion to be exercised depending on the circumstances of a particular case. The circumstances of this case is such that, if the orders are granted, innocent parties will be greatly disadvantaged who have valid licences to engage in the business of the export of kava to New Caledonia to persons of their choice.
    
15. As such, it is my view that the answer to the issue must be no. The Court cannot exercise that discretion in the circumstances of this case. Therefore the application is refused. The Claimant’s remedy must lie in its proceedings for damages against VCMB.
    
16. Costs awarded against Maison du Vanuatu and to be taxed if not agreed.
    

DATED at Port Vila, this 29th day of March, 2007.

H. BULU
Judge