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High Court of Solomon Islands |
HIGH COURT OF SOLOMON ISLANDS
HCSI-Civil Case No. 061 of 2006
HCSI-Civil Case No. 103 of 2006
HCSI-Civil Case No. 091 of 2006
ATTORNEY-GENERAL
-v-
PACRIM, SIMEON BOURO
PACRIM
–v-
ATTORNEY-GENERAL
S.M.M. SOLOMON LTD.
–v-
PACRIM, ATTORNEY-GENERAL
(Representing Minister of Mines and Energy,
Director of Mines and Minerals Board)
Date of Hearing: 24, 25, 26 May 26, 27, 28 June 2006
Date of Ruling: 1 December 2006
N. Moshinsky QC (with M. Ipo) the Solicitor-General for the Attorney-General
J. Apaniai for the 1stDefendant
F. Waleanisia for the 2nd Defendant (Simeon Bouro)
J. Sullivan QC with R. Kingmele for SMM Solomon Ltd
Summons seeking orders for prerogative writs of certiorari and declarations
Brown, J: In the 1st above mentioned proceedings (cc. 612/2006) the Attorney, by statement of claim sought a declaration that the decision of the Honourable Minister Mr. Simeon Bouro (the 2nd Minister), to renew the prospecting licences of the 1st defendant, Pacrim Resources Ltd, (Pacrim) was invalid. The Attorney sought a consequent declaration that the 3 renewed licences given on the 18 January 2006 to the company were invalid and unlawful and that acts of the company since the purported grant of the licences on the 18 January constitute a trespass upon the land the subject of exploration.
The Attorney sought the prerogative writ of Certiorari, to quash the 2nd Ministers award of the prospecting licences.
Pending hearing, the court had restrained the company from carrying out any further work or entering the exploratory land on Isabel at Takata, North San George and South San George. On the 2nd March 2006, ex parte orders to that effect were granted after leave was given to proceed to apply for the prerogative writ. Reasons in relation to those interim injunctive orders and the question of leave in the circumstances of the Attorneys claim against the Minister were published. The injunctive orders remain in force and I must consider their continuation or not in these reasons.
On the 20 March 2006 (cc 103 of 2006) the company, Pacrim, by writ of summons, sought leave to pursue an order of certiorari to bring up and quash the decision of the earlier Minister for Mines, the Honourable Basil Manelegua whereby he refused to renew Pacrims’ 3 prospecting licences for reasons set out in the Ministers letter of the 27 July 2005 and a consequential declaration that the later decision of the 2nd Minister the Honourable Simeon Bouro given by letter dated 16 January 2006 granting renewal of the 3 prospecting licences was valid and effective. In these proceedings by Pacrim it was the actions of the earlier Minister of Mines, the Honourable Basil Manelegua which were sought to be impugned, for the earlier Minister, by that letter dated the 27 July 2005 refused to renew Pacrims 3 prospecting licences, Pacrim deny receiving that letter and argue it cannot be bound by the purported decision of the Minister refusing renewal in all the circumstances. In its application for certiorari, to quash the decision of the Honourable Basil Manelegua in refusing to renew the licences, the company pleaded that in any event, the Ministers actions were "unreasonable" for that he failed to properly consider the Mineral Board’s recommendations favouring Pacrim; that he misapprehended his discretion to renew or not under s. 24 (6) of the Mining Act and that the Ministers acts were biased against the company and arose from improper motives related to the Ministers conduct towards S. M. M. Solomons Ltd (Sumitomo).. (Pacrim, as part of its application for leave to have brought up and quashed the earlier Ministers refusal to renew the licences, claimed a breach of the principles of natural justice which have become part of this countries’ administrative law, for that the Minister did not convey his decision refusing renewal as alleged, thus depriving the applicant for renewal of the opportunity to be heard and seek further remedy.)
It can be seen on the face of the two Ministers apparent acts, a refusal by the earlier Minister to renew Pacrims 3 licences and a later grant of renewal by Minister Bouro in January this year. Pacrim seeks to support that later renewal (and consequently opposes the claims of the Attorney in cc 061 of 2006) and reject the earlier refusal to renew by Minister Manelegua.
To add to the mix, by 3rd proceedings ordered to be joined and heard conjointly with the earlier two, Sumitomo on the 9 March 2006 sought by way of writ of summons (cc. 91/2006) certiorari to remove and quash the later Minister Bouro’s decision to renew Pacrim’s prospecting licences (an application reflecting that of the Attorney in the 1st mentioned proceedings) and as well sought to bring up and quash at this time, the Director of Mines decision to reject Sumitomo’s application for prospecting licences over exploration land at Takata and San Jorge at Isabel with a consequential order that Sumitomo’s applications be referred back to the Mineral Board for fresh consideration with priority as to the time of original lodgement. (For by determination of the Board given on the 16 December 2005 those applications to prospect by Sumitomo were refused for reasons explained later).
I should say at the outset that it is important to distinguish the difference between an application to renew a prospecting licence and a fresh application to prospect. The Mining Act is clear that unless renewed accordance with the Act, prospecting licences expire upon effluxion of time unless converted to mining licences. Pacrims licenses were due to expire on the 20 November 2004.
The question of the Attorney’s standing to bring these proceedings was raised in the earlier hearing on leave for the Attorney to proceed. I gave reasons why I was satisfied the Attorney had initiated proceedings to protect a public right threatened (the right of the public to certainty in the conduct of ministerial duties). There has been further argument on the question. Nothing has been said which leads me to change my view, although Mr. Waleanisia, for Minister Bouro argued to the contrary relying on factual matters which he said went to show landowner support of Mr. Bouro’s decision. I do not agree that is necessarily determinative, nor am I satisfied of the apparent fact of such supposed support at the relevant date, 12 January 2006. For "public interest" goes beyond the interest of a particular group, the landowners, a group which may be categorised as "individuals’ interest" in the sense understood in Malik v. Narendrea Dadlich AIR 199 SC 3211 quoted me from Gopal Sri Ram at p4 in the Journal of Commonwealth Lawyers Association, August 2005, Vol 14 No. 2 Article – Procedure and Remedies in Judicial Review: A Malaysian Perspective.
The Central Preliminary Issue
I am indebted to Mr. Moshinsky for he has couched the issue in these terms.
Did Mr Basil Manelegua make a decision ("the decision") on or about the 27 July 2005 to reject the 2nd defendant’s application to renew its licences?
For if this decision was not made, then it follows, Mr. Moshinsky says, that the 2nd decisions in January this year by Mr. Simeon Bouro is valid.
Mr. Moshinsky apprehended that Pacrim would argue, as it did, "the decision" was not communicated to the company and thus could not be valid.
The Attorneys’ argument supported by Mr. Sullivan for Sumitomo but disputed by Pacrim and Mr. Bouro was that communication of the 1st Ministers decision to Pacrim was not essential to its validity or completeness. Although, in terms of the rationale of Northrop J. given in Rice growers Cooperative Mills Ltd v. Bannerman anor (38 A L R 536, 544) "there must be some overt act by which the conclusions reached as a result of those thought processes are manifest".
It stands to reason a "decision" needs to be made manifest. Here, the Attorney says it took the form of a letter by the 1st Minister Basil Manelegua. That, by itself was sufficient evidence to warrant this courts finding that the "decision" was made.
I am satisfied that such a "decision" was made and manifested by the terms of the letter to Pacrim.
The evidence of the 1st Minister, Basil Manelegua to the effect that he signed the letter and directed its delivery was not undermined in cross examination. The existence of such a letter (which was in evidence and formed part of Manelegua’s affidavit of the 26 February 2006, "BM 5") was supported by Irene Baekalia, the Assistant Personal Secretary to the Minister, Armsteady Rovally and Ofani Eremae, the Editor of the Solomon Star who published an account of the letter on the 5 August 2005 a short time after the 27 July.
Whilst the issue about "delivery" or knowledge of the letter was contested, the fact of the letters existence was apparent on the evidence. Any suggestion that it was actually written after the event and placed on files as justification for acts of the 1st Minister to freeze out, as it were, Pacrims continued involvement in the licensing process, is not supported by the evidence. I find that the letter was created and dated 27 July 2005, for there was direct evidence of that fact.
This finding still leaves for determination whether or not Pacrim had notice. Pacrim contends that it had not been given the letter of "decision". The evidence shows, however the behaviour of the Director of Pacrim, Mr Ewan Stoddart in alleging bribery at the meeting on the 8 August 2005 was an emotional out burst directed towards the 1st Minister, Mr. Manelegua. That meeting was at Mr. Stoddart’s request in the Office of the Department of Mines at Lengakiki. Mr. Don Tolia and Mr. Elison Habu were also present. The recollections of the meeting were varied but Mr. Stoddart’s case was that his emotion was caused by the apparent failure to consider and consequent delay in his licence renewal, a failure attributed to the Ministers alignment with Sumitomo. The recollection of the Minister was that Mr. Stoddart complained to him about the non-renewal and asked for a second chance. His complaints were consequently directly related to the Ministers refusal to renew known to Mr. Stoddard. The Minister said Mr. Stoddard accused him of accepting bribes from Sumitomo. Mr. Stoddard threatened to inform the media and complain to RAMSI. It stands to reason that the attitude by Mr. Stoddard evinced at the meeting cannot be said to be that of one seeking to influence a decision-maker who remains undecided, rather it is one who has had a decision made, adverse to Mr. Stoddard’s wishes.
Those particular persons were examined and cross examined at length. The fact of the meeting on the 8 August cannot be looked at in isolation for it followed a series of happenings and events which need to be taken into account to bring meaning to the purpose of the meeting. That purpose of Pacrim I am satisfied was, as Mr. Manelegua says to give Pacrim a second chance.
On the 8 October 2004 Pacrim lodged its application for renewal of licences. A number of matters of concern to the Minister were raised in a letter to Pacrim, (the "notice to show cause letter") posted on the 27 June 2005. In reply, the Minister received 2 letters, dated 11 & 12 July 2005 from Pacrim. As a consequence, the Minister was not satisfied by the replies and decided to reject the application by Pacrim. His "decision" by means of a letter was sent on the 27 July 2005. Shortly afterwards, the Solomon Star (5th August 2005) published the material effect of the decision, (rejecting Pacrims application), and Mr. Stoddart the Managing Director of Pacrim, came into country seeking a meeting with the Minister on the 8th August.
Having heard Mr. Stoddart, I cannot accept the interpretation he seeks to place upon the meeting of the 8 August. I prefer the recollection of the Minister supported as he was by both Mr. Tolia and Mr. Habu.
Of particular note is that the "decision" was never acknowledged to have been received by Pacrim yet Pacrim must presumably have been looking for the Ministers decision after the company responded to the "show cause" letter; the company had close relations with the Director, Mr. Qopoto yet chose to do nothing effectively until some 2 days after the appointment of Minister Bouro in early January the following year when Mr. Qopoto pursued the "renewal" on Pacrim’s behalf.
On the 28 July 2005 the Minister says he personally addressed an envelope with a copy of the letter of "decision" and gave it to his driver Mr. David Palma with instructions to deliver it to the Office of Pacrim at Point Cruz. I have heard both Mr. Palma and the employee of Pacrim Mr. Huhugo and prefer the evidence of Mr. Palma. Mr. Huhugo denied ever having received the letter or having seen Mr. Palma in the Office. I do not need to reject his denials. Mr. Palma’s recollection of the office was supportive of his whole recollections of delivery and corresponds with the instructions recounted by the Minister. If Mr. Huhugo has no recollection that in itself does not negate the plausibility of Mr. Palma’s evidence. The evidentiary weight of all these material factors is that I am satisfied on balance that the decision refusing renewal was communicated to the company. Those earlier "show cause" letters and replies by Pacrim apparently utilised the ordinary course of post yet the decision of the Minister by letter, in this particular instance, failed the postal service I am asked to believe.
The claims by Pacrim to a declaration that the 1st Minister’s decision was "null and void and of no effect" was based on its argument that when exercising its powers to judicially review the Ministers decision the court will find that the Minister exercised his powers "unreasonably" and that doctrine of "unreasonableness" is apposite when I look at the facts in this case.
The second ground relied upon was that the 1st Minister failed to adequately consider the Mineral Boards recommendation that Pacrim’s licences be renewed.
The third ground was that the Minister failed to properly exercise his discretion under s. 24 of the Mines Act.
The fourth ground was that the Minister exhibited bias against Pacrim or had improper motives underlying his refusal to renew, motives attributable to his shown favouritism towards Sumitomo.
On the 27 June 2005 the 1st Minister sent a letter to Pacrim, addressed to its post box number in Honiara. That letter (or "show cause" letter as I call it) raised some ten matters to which the Minister invited Pacrim’s response for those matters principally went to the issue of whether or not Pacrim had complied with the terms and conditions of its licence which the company sought to renew. The Minister’s obligation in the circumstances of such application for renewal is to be found in s. 24 (6) of the Mining Act. At that time Sumitomo had no pending prospecting applications before the Board conflicting with the areas the subject of Pacrim’s renewal applications.
In the "show cause" letter the Minister raised what he saw as material non-compliance by Pacrim in terms of its licence under the Act. To illustrate the matters going to the material non-compliance, the company’s response and the Ministers reasons and findings on the "show cause", Mr. Moshinsky’s diagrammatic representation contained in his submissions have assisted me.
I have not included the diagrammatic representation but have related my later findings on the Ministers’ supposed breaches of the Wednesbury principles to this document.
Mr. Apaniai for Pacrim argues that those responses by the Minister Manelegua are "unreasonable" in the circumstances. In so far as the non-payment of the deposit of $500k was concerned, he relied upon, to a large extent, the evidence of Mr. Qopoto who spoke of an earlier Minister’s acceptance of the lesser amount of $100k. I find that money, in any event was not paid but rather remained in the company’s bank account, under the companies control howsoever the account may have been entitled. I find no bond was ever received in accordance with the licence terms, whether the original requiring $500K or the supposed varied term of $100K.
The importance of the enquiry into this issue was not so much the failure of Pacrim to satisfy me of the existence of a bond but rather the willingness of the Managing Director of Pacrim Mr. Stoddart to dissemble about the matter. His cross examination, dealing with exhibit "12" (letter of Aikman Stoddart dated 15 November 2002 to Ministry of Mines and Energy detailing terms under which the company Pacrim would provide the bond of $500,00 cdn) clearly revealed that.
This dissembling continued as evidenced by Mr. Stoddarts letter of the 11 July 2005 ("BM 3"), where reporting failures were explained away, but it become plain in the hearing before me, that the company was relying on reports prepared by Mr. Qopoto and Mr. Auga (as a Departmental report) both seconded to Pacrim, where-as for the period November 2002 – July 2004 no real prospecting activity was carried out at all. Yet in his letter of the 11 July 2005, Mr. Stoddart, suggested that the Department had lost the "detailed presentation on the 8 October 2004 on all exploration results to date" and "threatened to sue the Government for compensation if it had given these reports to another company". I find those threats were typical of Mr. Stoddart’s bluff and bluster and were made with purpose to coerce and intimidate. I am satisfied that the company substantially failed to comply with its reporting obligation under S. 27 of the Act.
Again when answering the question posed about the existence of a surface access agreement, Mr. Stoddart said-
"(d) The landowners of the respective areas are, as far as we are aware, happy and have willingly signed the surface Access Agreement with our company".
This was untruthful. No fresh access agreement required by s. 24(6) (e) of the Act had been signed when the letter was written. An agreement was in fact signed on the 7 August 2005 (exhibit "15"). But that agreement is not, as Mr. Sullivan points out, an agreement envisaged by s. 24 (6) "for that it was a document signed by Bugotu Landowners Association, an association purporting to be trustees of landowners who it transpires comprise some 32 tribes about the licence areas."
The document was signed by 9 representatives of the Association but there is no evidence that the 32 tribes have assigned their rights under the Mining Act to the particular Association.
There was consequently no subsisting surface agreement, a prerequisite to the Ministers grant of any licence renewal. (S. 24 (6) (e) of the Mining Act).
It is apparent from the diagrammatic representation that the three issues touched above were not the only issues addressed by the 1st Minster's reasons in the 3rd column. But when I read the Ministers letter of the 27 July 2005 his detailed reasons supporting his refusal to renew are plain. The argument now raised by Pacrim, that by law the maximum amount of any security bond to be imposed on the company, SI$15K, was not an argument raised at the time of Pacrims reply to the 1st Ministers "show cause" notice. I have dealt with the factual matters surrounding the company’s alleged satisfaction of that bond requirement. I now deal with the legal argument, for it relies upon amendments to regulations in the Mines and Minerals (Amendment) Regulations 1999. By Item 5 of the Second Schedule the amount of compliance security deposit prescribed is SI$15K. The company argues that moneys over and above that prescription cannot validly be required by the Minister. Mr. Sullivan’s argument on this point finds favour for the earlier schedule was not expressly or impliedly repealed. Mr. Sullivan had much authority. (IRC v. Duke of Westminster (1936) AC 1 per Lord Russell at 24-25; Anderson v. Commissioner of Taxes (Vic) [1937] HCA 24; (1937) 57 CLR 233 per Lalham CJ at 239; C & J Clark Ltd v. 1 RC (1975) 1 WLR 413 per Searman LJ at 419) and Re Chance (1936) Ch 266 per Farwell LJ at 270)).
As well Mr, Sullivan argues that, in so far as Regulation 22 speaks only of fees, while the Second Schedule contains an entry – "4. (d) – Compliance Deposit - $15,000". Such deposit cannot be a "fee". With that I agree. Apart from the obvious difference in understanding ‘fee" to means "deposit", the Minister originally granting the prospecting licences, as well imposed the condition of a "bond" in terms of S. 80 (h) of the Act. No regulations affect the "bond" sought. The bond is for assurance that when the nature and extent of prospecting in these licence areas is considered with the commensurate risk of unreasonable damage to the environment a sufficient "bond" amount predicated by the risk is to be expected. No bond was ever provided. Compliance deposit relates to the terms of the licence, compliance with reporting time frames; expenditure; geological surveys etc and is money at risk of forfeiture to the Government.
Failure to take into account relevant considerations
Pacrim had the support of the Mineral Board in its application to renew. I struck out that part of Mr. John Lucas’s affidavit for it was irrelevant. Section 24 (6) of the Mining Act prescribes the matters relevant for the Ministers consideration on renewal. . Pacrim’s argument must fail.
Bias
Mr. Apaniai’s argument on this aspect was based primarily on the fact of Mr. Manelegua’s trip to the San Jorge Prospecting area with a team from Sumitomo prior to his appointment as Minister in 2004 and the statements he was alleged to have made at a particular meeting on the 16 July 2005. Frankly this is of little moment for Sumitomo is part of a large conglomerate with mining interests about the world. To reiterate this cannot be ipso facto bias.
More seriously Mr. Stoddart alleged dishonesty at the meeting of the 8 August 2005 attended by the Minister, Mr. Manelegua, Mr. Habu and Mr. Tolia, the assertion was made but denied by Mr. Manelegua. There was no real argument to explain the circumstances if any, of the basis for the allegation, apart from the assertion by Mr. Stoddart, but having heard him and read the material which was filed by him, it seems more likely that the assertion was a manifestation of the "fundamental attribution error" than one having a basis in fact.
Mr. Apaniai says the trip was publically seen as support for Sumitomo for that at the time Mr. Manelegua spoke in favour of the Japanese Company.
The meeting at San Jorge were not concerned with the Pacrim prospecting areas. His position as an MP and landowner on Isabel afford him status and opportunity to influence persons on the ground. But, as Mr. Sullivan says, whilst he may have formed a favourable view of Sumitomo’s capabilities, that view per se does not demonstrate bias against Pacrim. To suggest that such a favourable view coloured the Ministers thinking with respect to the licence renewal applications may be asserted but the documentary evidence illustrates the flaw in Pacrims argument, for the decision to reject was reliant on failings by Pacrim. There was no completing claim by Sumitomo over the subject exploration land.
The evidence about the meeting of the 15 July 2005 was the subject of much cross-examination. At that meeting the Minister, Mr. Manelegua had the Director, Mr. Qopoto (and Chairman of the Minutes and Minerals Board), Mr. Lepe of Sol-Law, a law Clerk and Mr. McGuire a lawyer of that firm, present. This meeting touches on the very fact of the letter of refusal to renew, for the meeting was clearly about that issue for Mr. Qopoto deposed to his recollection that the Minister spoke of giving Pacrim 21 days to show cause, after which the Minister would "cancel their licence and give it to you" (Sumitomo). Mr. McGuire recalls a meeting where those present discussed the Pacrim renewal. Mr. McGuire agreed that the Minister spoke of not renewing the Pacrim application but has no recollection of the Minister saying that he would give the licences to Sumimoto. Sumitomo’s application for prospecting parcels had been considered; any where they then conflicted with Pacrim areas, had been refused. So there was no pending application by Sumitomo affecting Pacrim’s prospecting area. I do not accept Mr. Qopoto’s assertion that the Minister said he would give "the licence to Sumitomo". In cross-examination Mr. Qopoto stated that Pacrim’s application (for renewal) was pending in August 2005. He said "based on advice of the Board in June, Pacrim’s application is pending – based on the Board decision (it was) still to receive advice of the Minister how we were to go about it". Later, he conceded he knew (when it was suggested he knew early in August of a decision of the Minister) but when asked whether he took steps, to find out more of the Ministers decision, he said "no, because we cannot interfere with politics as far as our normal work is concerned".
I am satisfied Mr. Qopoto knew of the fact of the Ministers refusal to renew Pacrims licences for his interest in Pacrims renewal was personal, arising from his close association with Mr. Stoddart and his employment earlier with the company, yet he presumed to ignore the natural consequences of the Ministers comments of the meeting of the 15 July, the newspaper report of which he was aware and the subsequent notice by the Department Secretary to discontinue association with Pacrim; which preceded the later meeting of the Board in December 2005. All these matters suggest Mr. Qopoto was blind to the fact of the Ministers’ refusal to renew by letter of the 27 July.
Mr. Qopoto’s bias towards Pacrim was thus apparent
The minutes of the later Board meeting of the 16 December reflect what I find to be the contrived ignorance of Mr. Qopoto of the Ministers rejection of Pacrim’s applications for renewal given under the Ministers hand of the 27 July. That letter formed the basis of the Solomon Star Newspaper article; it was on both the float file and Bugotu Nickel Project file and had been sent to Pacrim. Had a copy of the letter been given Mr. Qopoto, as Director, his refusal to acknowledge its existence may have taken another turn, but as it was, on hearing him, his denials of having seen the letter relate to his clear bias in favour of Pacrim and do him no credit in the light of the fact of the letter, it promulgation to Pacrim and publication in the department and the press. For I am satisfied Mr. Stoddard clearly had knowledge of it.
It is appropriate, here, to comment on witnesses of the plaintiff, Pacrim which has the burden of satisfying me on balance that the 1st Ministers decision should be quashed. For it was that decision, first in time which led to the various others impugned in these joined proceedings.
Mr. Qopoto
I do not find him to be a witness of truth. His evidence was unreliable for that reason. His evidence and his actions as the Director of Mines since his appointment on the 25 April 2005 reflect clear bias towards Pacrim’s interest in having its licences renewed. He was in fact employed by Pacrim while still with the Minutes Department. Consequently his report to the Mineral Board in June 2005 was favourable when objectively the very matters which the Minister was obliged to query Pacrim about were matters for the Director to enquire into, not answer as an apologist for the company. This appears from his failure to put to the Board Pacrim's apparent breaches of its licence obligations, including the very material breach relating to the company assertion about a former Ministers comment to substitute the original security bond by what was in fact, a deposit of far less money in the Westpac Bank account of the company, by way of term deposit accompanied by a letter of the Bank. (See Annex CQ "2" to Qopoto’s affidavit of 10 April 2006) the letter, dated 26 May 2004, addressed to the then Minister of Mines, the Hon. Stephen Paeni confirmed the company had a sum of SBD$100,000 on term deposit but went on to say-"We also confirm that we have been advised by Pacrim that they are prepared to have the term deposit treated as a Security bond for any reclamation work required to be carried out following prospecting work done by Pacrim on the islands of San Jorge and Santa Isabel". The letter was signed by the Country Head of the Bank. Mr. Lucas who was asked about the status of the funds was unable to throw any light on the whereabouts of the money at the time of trial and in terms of a "bond" the letter does not tend to that characterization, for it does not suggest the bank will be bound, but rather states the obvious that money belonging to the company is on deposit with the bank. Mr. Qopoto was recorded, at p 58 of the Mineral Board Meeting of 15-16 June 2005 minutes as party with the Secretary of the Department, in explanation to the Provincial Secretary:
"The Board Members were also informed that the company has put on $100,000 to meet any rehabilitation, or as part of the Bond previous requested by the Minerals Board in 20-02".
In 2002 (exhibit "12") the Permanent Secretary by letter dated 19 December 2002 made plain that the "bond" of Canadian$500,000 was security for compliance (with the license conditions) "as well as to test your company’s financial capabilities". Mr. Stoddart was further advised that the bond was to be made with a commercial bank in Solomon Islands, (a condition imposed by the Board) and that any alteration to the bond "will have to be made by the board".
To Mr. Qopoto’s knowledge the purported variations to the "bond" was made by a Minister (contrary to the terms of the Act) not the Board and the sum of SI$100, 00 was not a "bond" in terms envisaged. He may be said to have misled the meeting on the 15-16 June 2005.
The next matter which reflects on Mr. Qopoto’s credit is that which I have already touched on, the evidence about the Minister Mr. Manelegua’s meeting of the 15 July 2005. I accept Mr. McGuires evidence that while the Minster admittedly was said to intend to refuse Pacrims application, he had no recollection of the Minister saying he would give the licence to Sumitomo, as alleged by Mr. Qopoto. For a fortiori without pending application, it stands to reason the Minister had no basis to suggest such course. What is apparent, however, is Mr. Qopoto’s allegiance with Pacrim’s interest which reflects on both his bias and his credibility.
A further matter which leaves me in no doubt that Mr. Qopoto has exhibited bias towards Pacrim was his letter to the Minister on the 15 April 2003 seeking to extend the time allowed the company to commence work. Coupled with his expressed ignorance of the underlying cause for the Permanent Secretaries memo to staff of the Mines Department warning them against further dealings with the company, was his purposeful memo 08/06 dated 18 January 2006 to the. "Caretaker Hon. Minister, Attention. Hon. Simeon Bouro" which failed to refer to the earlier Ministers refusal to renew or the Permanent Secretaries directive against dealing with Pacrim.
In cross examination Mr. Qopoto admitted he had heard that Minister Manelegua had cancelled Pacrim’s licence – "he refused verbally" but denied seeing a letter of cancellation. If that was the case, I find it wholly implausible when I have regard to his answers in his cross examination concerning why he, of all people, had not seen the letter of the Minister of the 27 July 2005, especially after he had Mr. Don Tolia’s memo, which was explicit by its reference to Mr. Manelegua’s decision and equally explicit about no further dealing with Pacrim?
Mr. Stoddart
Mr. Stoddart’s credibility was in issue for he too, denied receiving the Minister’s letter of the 27 July 2005. Mr. Moshinsky says Mr. Stoddart cannot be believed on this point for he has been shown to be an untruthful witness in earlier court proceedings in Australia. While that is the case, it does not necessarily mean I should find him to be untruthful on this point. But his antecedents do not stand him in good stead. Those antecedents include current tax fraud charges against him as well as proceedings including a restraining order, by a senior judge of the Federal Court of Australia under the Proceeds of Crime Act (Cth). I have detailed the "bond" variation which by inference mislead the Ministry of Mines into forming the view that $500,000 (CMD) was available when in fact on the evidence there was never compliance with the terms of the bond requirements, and the company has not satisfied me it had the financial arrangements in place to facilitate a bond by a commercial bank in the Solomon Islands. By that deceptive conduct in alleging the pre requisite to the grant of a bond, by a reputable bank in Hong Kong (without any supporting documentation of the Bank evincing knowledge of its obligation) Mr. Stoddart’s credibility has suffered in these proceedings before me. Such behaviour accords with the behaviour criticized by the judge in Australia.
The particular issue as to whether or not Mr. Stoddart received the letter of refusal to renew is determined, in the Attorney’s favour and accords with the evidence surrounding the delivery of the letter to the office of Pacrim. It beggars belief that Mr. Stoddart was unaware of the letter after publication of its terms in the Solomon Star and Mr. Stoddart’s subsequent insistent person-to-person meeting with Minister Manelegua. It consequently follows that Mr. Qopoto’s denials of knowledge of the fact of the letter until quite some time later, when considered with the Department Secretaries direction to cease communications with Pacrim, both show Mr. Qopoto to be either oblivious to the happenings about him or untruthful, and when I look at the obvious attempts to further Pacrim’s interest with the Board and Minister, he cannot be said to be ignorant of the proceedings in the Department or of the Minister Manelegua’s decision communicated by letter. He is biased towards Pacrim’s interest. His dissembling about the letter, his clear favoritism towards Pacrim and the manner of his later approach to the second Minister for Mines leave me in no doubt about his unreliability as a witness for that goes to the heart of the Attorney’s case calling for a declaration that the renewed licenses by Minister Bouro are invalid and unlawful.
The use by Pacrim of both Mr. Auga and Mr. Qopoto whilst on its face, unobjectionable, as employees, clearly resulted in these departmental officers active support for Pacrim whenever the company was obligated to respond to criticism or queries. Most tellingly is the report, exhibit "11" written by these two, a report used by the company as its own to seek to satisfy its obligations under its licence. A dispassionate view of Mr. Qopoto’s version of events about the time of the 1st Ministers letter, illustrates the subsequent untruthfulness in his later approach to the 2nd Minister by virtue of his clear omission to tell the Minister of the earlier Ministers decision.
Mr. Manelegua’s decision
The decision of the Minister Manelegua to reject the application by Pacrim for a renewal of its prospecting licences was confirmed by Mr. Manelegua’s evidence in chief. He was not shifted in cross examination. The decision was made manifest his letter of the 27 July 2005. I am satisfied the letter was both written and delivered. The letter was written and dated for there is evidence, beyond that given by Mr. Manelegua, which corroborates this. The signed letter was seen by Mr. Ellison Habu. It precipitated the Secretary’s warning to the departmental staff. It was the basis of the Solomon Star report and clearly was the instigating factor which brought Mr. Stoddart back to the Solomons to confront Mr. Manelegua. As well, the letter was on the Bugotu Nickel file and Mr. Armsteady Rovally saw it there. Denial by Mr. Stoddart of not having received the letter, in the circumstances, cannot go to the fact that the letter existed and was dated 27 July 2005. It can only go to the issue of its receipt by the company. In this case, that is a prerequisite to its effectiveness.
Mr. Moshinsky suggested relying on the dictum of Northrop J in Ricegrowers Co-op. v. Bannerman anor (38 ALR 536 at 541) that the ministers decision made under an enactment can be valid and complete without the requirement that it be communicated to persons affected by it. That may well be the case where the decision is published generally and affects all equally but where the decision specifically relates to a request of a person, company or authority for a particular act of the Minister it cannot be conclusive unless that particular act is communicated to the petitioner. To find otherwise would be unfair since there may be time limitations affecting rights to seek review in particular cases.
In this case, despite Mr. Stoddart’s and the companies arguments to the contrary, I am satisfied the letter of refusal was delivered as deposed to by Mr. David Palmer. I consequently accept Mr. Palmer’s evidence on point and do not accept Mr. Huhugo’s denials. The circumstances surrounding the delivery and publication of the letter leave me in no doubt that the letter was delivered to the company and Mr. Stoddart was vicariously aware.
Having satisfied myself of the fact of the decision and its delivery to the company, I need ask whether it is valid and here the Ministers power is impugned by the company for that Mr. Manelegua acted unreasonably in refusing to renew the licence. Mr. Apaniai for Pacrim, relied on various cases which illustrate the principle of "unreasonableness" and the courts power of review, following especially that of Associated Picture Houses v. Wednesbury Corporation [1947] EWCA Civ 1; (1947) 2 ALL ER 680. In Anisiminic Ltd v The Foreign Compensation Commission anor [1968] UKHL 6; (1969) 2 WLR 163, Lord Reid at p. 6 of the judgment set out doctrine in relation to the various ways in which a tribunal or authority can fall into error in the decision making process and Mr. Apaniai addressed 10 aspects of the Ministers decision which, he says, amount to mistake sufficient to be "unreasonable" or in the particular, such an error which vitiated the Ministers act so that it was a nullity.
Of course, this court should be wary of falling into the trap of seeking to stand in the place of the decision-maker, for that is not the courts role in judicial review, rather the court is obliged to see the decision maker complies with his obligations under the law, and should not seek to weigh up or subjectively balance the material in issue, questions for the executive authority to decide. The language of Wednesbury has changed a little to that of Lord Diplock in Council of Civil Service Unions anors (1985) 1 A.C. 374, but the principle remains the same. This court should not substitute its own view of the "reasonableness" of the Ministers decision.
Until it has been clearly shown to be invalid, and this court so orders, the decision of the 1st Minister stands.
To look then, at Pacrim’s grounds objectively, I need to look closely at the evidence on which Pacrim relies in support of its argument, bearing in mind its relevance in terms of the authorities above.
The company argues that the compliance security deposit prescribed is SI$150K. Consequently the claim for a bond of CDM $550K is illegal. In the alternative, the company had an earlier Minster for Mines vary the security deposit required downwards to SI $100K which was paid.
I have described the circumstances surrounding the alleged deposit. There is no evidence a "bond" was ever arranged in terms required nor that the reduced "security deposit" was secured in form so as to be available for disbursement at the direction of the Minister or Board where the company has breached its conditions of license. In fact the money always remained in the account of Pacrim and on the evidence of Johnson Lucas, the Company Director, its use was not within his knowledge. The "bond" required by the Board originally is not a "security deposit" since the terms are not interchangeable. It stands to reason where physical damage to the environment is caused to land the subject of the prospecting licence (which covers a huge area) beyond that reasonably envisaged in the works program approved, the landowners are entitled to the recourse to such a sum as may ameliorate their damage. The security deposit is related to the penalty as it were, for breach of the conditions of the licence imposed and is forfeit to the government. This ground has no merit.
2. Non-submission of quarterly reports.
The company argues that there was substantial compliance with the requirement to produce reports. In fact no prospecting work was carried out in the period 2002 to about August 2004 because the Provincial Government insisted the company pay for a Provincial Business Licence. Later the two officers of the Mines Department were seconded to Pacrim and it was their report which Pacrim relies upon as "periodic reports". This report was done on the 19 March 2004. In addition, 13 sets of Gio-technical reports are proffered as "periodic reports" when they clearly are not.
It is plain the company had not been, on its own admission carrying out prospecting work of note before July 2004, but the reasons for that omission was obviously within Pacrim’s control (it could pay the Business Licence Fees and argue afterwards) and the exercise of the Ministers discretion to find failure, in these circumstances was open to him.
There was a clear breached of s. 27(2) of the Act for the change, even if discussed, had not the Directors approval.
4. Tenement fees paid late.
While Pacrim seeks to explain the fact remains the fees, ascertainable were paid late.
This is plain, no evidence of a valid landowner agreement at the time of the application for renewal has been shown to exist. Reliance on the supposed acquiescence by the Provincial Secretary to the renewal of the licences was wrong in fact (for that the Secretary conceded that he had no power to stop the Minerals Board decision) an in law, for the concurrence or otherwise was irrelevant.
6. Transfer of licences to Pacrim Resources Ltd (name change).
No issue arises in this case.
This allegation has been made out. The terms of the Act have not strictly been complied with although in fact the application was processed. No issue arises in this case.
To recap, then the duty of this court, when asked to consider "illegality" or "irrationality" is that to be found in the case law discussed in De Smith Woolf and Jowell "Judicial Review of Administrative Action" 5th ed; at para 6-001 referred to by Mr. Moshinsky. For the quotation from the learned authors-
"the lack for the courts in evaluating whether a decision is illegal is essentially one of construing the content and scope of the instrument conferring the power in order to determine whether the decision falls within its "for corners""-
The Ministers powers are governed by s. 24 of the Act;
"s. 24 (2) The holder of a prospecting licence may at any time, not later than thirty days before the expiry of such licence, apply to the Director for a renewal thereof for a period not exceeding two years and of an area not more than half of the initial area covered by the licence, so however, that the Board may authorize a renewal for a larger area if, in its opinion, such authorization would be in the national interest.
Each application for renewal of a prospecting licence shall be made to the Director and shall be accompanied by-
(a) two reports, one on the area to be relinquished and the other on the area to be retained, both such reports indicating-
(i) the results of prospecting operations carried out to the date of such application;
(ii) an evaluation of the mineral prospects in the area; and
(iii) the direct costs incurred to the date of application
(c) a proposed prospecting programme to be carried out during the period of renewal.
(d) copies of agreements with landowners relating to surface access rights and fees, and compensation for damage, during the period of renewal;
The Director may require an applicant to amend a renewal application with respect to the proposed work programme and other matters.
The Minister shall grant the renewal of a prospecting licence where he is satisfied.
(a) that the holder has complied with the terms and conditions of his licence and the provisions of this Act or any regulations made thereunder;
(b) that the proposed prospecting programme and minimum expenditure commitments are reasonably satisfactory to test the mineral prospects of the area in respect of which the renewal is made; and
(c) that the holder has reached agreement with the landowners or land holding groups regarding surface access rights and fees and, compensation for damage during the period of the renewal".
I am satisfied, on reading the Ministers request to show cause why he should renew the companies licences, that he has directed his attention to those matters in the section. Consequently his decision has not been shown to be "illegal" in the sense understood in Secretary for State for Education and Science v. Tameside M.B.C. [1976] UKHL 6; (1977) A.C. 1014, 1047.
Nor can it be said to be "irrational" or "unreasonable" (using the test espoused in Wednesbury and Bromley London Borough Council v. Greater London Council (1983) 1 A.C. 768, 821) for the reasons I have given. The flaw then in Pacrim's argument is that the decision makers refusal to renew has not been shown to be "unreasonable" in the sense understood as "Wednesbury unreasonableness" (Associated Provincial Picture Houses v Wednesbury Corporation) [1947] EWCA Civ 1; (1948) 1 KB 223; (1947) 2 ALL ER 680).
The decision by the Minister Manelegua of the 27 July 2005 to reject the company, Pacrim’s application to renew its licences is valid in terms of s. 24(6) for that, the Minister’s act in refusing the grant of renewal has not been shown to be wrong. The effect of the decision to refuse to renew is that the licenses sought to have been renewed, have lapsed. They are no more. Such licenses cannot be resurrected, as it were, by the purported act of the 2nd Minister Bouro. To allow such course must ignore the fact of the earlier valid refusal to renew which automatically resulted in the lapse of the licences. I should say, that I am not satisfied Minister Bouro was cognizant of the fact of the earlier refusal to renew with its consequential determination of such licences. But even were he to have acted on ignorance of the true state of affairs contained in the earlier Minister’s letter of the 27 July 2005, his purported act of renewal is nugatory. I adopt the principle expressed by Gummon J in Qusley v. R (1997) ALR510, at 555;
The more appropriate principle is that the validity of an administrative act or decision and the legality of steps taken pursuant to it were presumed valid until the act or decision is set aside in appropriate proceedings. Where "acts are of an official nature........everything is presumed to be rightly and duly performed until the contrary is proved......"
Applying that principle, the earlier executive act of the Minister Manelegua in refusing to renew is valid until set aside by a court of competent jurisdiction (for the Minister’s powers expressed in S. 24(6) are not amenable to review elsewhere, nor subsequently by another Minister) and this court refuses to interfere with the Minister’s determination in such proceedings.
The case law referred me by Mr. Moshinsky, again from "Judicial Review of Administrative Action" 5th edit at 260-261 clearly support his arguments and the principle set out above. I do not propose to point to the particular cases, they espouse the principle.
It follows, that where Minister Manelegua’s decision is valid the purported act of Minister Bouro in granting extensions of licences is not valid. The question whether this court should contemplate the claim by Pacrim to an order of certiorari has been answered in the negative for Minister Manelegua’s decision is valid in law.
Order 61 r. 2(1) of the High Court Rules
For the forgoing reasons, I refuse leave to Pacrim to apply for an order of certiorari for that no likelihood of success exists on the facts and the application is clearly out of time.
Pacrim's summons for such orders is dismissed and are costs awarded against the company.
The next issue which I shortly address is that suggestion in Pacrim’s argument over the Mineral Board decision of the 16 December 2005 to recommend to the 2nd Minister Pacrim’s license renewals as if the application were alive. The recommendation was clearly ultra vires the power of the Board for there were in fact, no licences to be renewed. They had lapsed. If I am wrong, the Board’s decision clearly failed to consider the factual train of events leading to the earlier Minister’s request to Pacrim to show cause and Mr. Manelegua’s subsequent refusal to renew on reasoned grounds by his letter of the 27 July 2005. None of this material had been properly brought before the Board and Mr. Qopoto’s culpability in that absence further illustrates his biased relationship with Pacrim. Even if I am wrong in accepting "publication" of that letter to Pacrim, the Board had a duty to properly enquire into the claim by Pacrim so that Mr. Oepoto’s failure to honestly appraise the Board of those earlier circumstances (for he acknowledged in court that he had become aware of the Minister’s act of refusal before the Board meeting) shows the Board acted in ignorance of the facts surrounding the earlier Ministers queries and the company answers relating to its renewal applications.. Such bias, tending to corrupt the process of the Board hearings, (for the Chairman allowed the meeting to proceed without alluding to all relevant matters as they affected Pacrim’s license, including those breaches of its licence conditions and the absence of landowner agreement, the fact of a competing license application and the reality of the earlier Minister’s letter of the 27 July) is of such moments that no reasonably constituted Board could be expected to fairly deal with its business in these circumstances. Its outcome, as Mr. Sullivan says must be tainted by the Chairman’s bias. So that the Board recommendation and the subsequent 2nd Minister’s purported act of renewal have no real basis in fact or law. I am satisfied that Minister Bouro’s decision was brought about by the misleading manner in which the Minister has been approached by Pacrim through Mr. Qotopto.
Mr. Waleanisia, separately representing the Minister Bouro, says that there was nothing wrong with the 2nd Ministers decision. His argument was that the Board proceedings of the 16 December 2005 were intra vires for that Mr. Qopoto, "when organising the meetings of the Board, chairing the Board, preparing submissions for Minister Bouro and when handling both Pacrim and Sumitomo issues at office level did so without bias and in accordance with due process". The flaw in that argument has been demonstrated, on the facts, to be the apparent bias of Mr. Qopoto. His attitude to the supposed incorrect manner of submitting a prospecting application (by failing to hand the document to him personally) of Sumitomo reflected in the Boards comments, coupled with his disregard of the earlier Ministers refusal to renew licences of Pacrim which had expired through effluxion of time, demonstrates his bias. The Board, as I have shown acted contrary to law in that it presumed to consider the Pacrim applications contrary to the absence of any valid fresh application by Pacrim. The Board further failed to address the "national interest" issue required by s. 24(2) of the Act if it honestly thought it was dealing with an application to renew. I should say that the 16 December Board meeting cannot be said to have impliedly recognised its obligation to consider s. 24(2) for there was no valid surface access agreement with landowners in existence, and that issue must surely be a paramount factor for the Board were it to look to the "national interest"; for landowners are "nationals".
Mr Waleanisia is quite correct where he argues that Minister Bouro is bound to listen to the advice of the Board on the issue of licences. Minister Bouro was appointed on the 18 January 2006, some 4 days after Minister Manelegua’s appointment was terminated and on the same day Mr. Qopoto briefed the new Minister on the issue of the supposed renewal of Pacrim licences. I find the briefing to have actually misled the 2nd Minister as to the true circumstances of the Pacrim licences.
A particular decision of the Mineral Board is one subject to review and by virtue of the errors that I have found cannot be allowed to stand. It had no jurisdiction to renew or recommend renewal of Pacrim’s licences for the Board’s decision to allow Pacrim leave to appeal under s. 71 of the Act misconceives the Section. That provision affords rights in the instance of cancellation or suspension of a license; not, as here, the case of lapse. To accept otherwise impliedly accepts the position of Mr. Qopoto, that the licences of Pacrim were in some way amenable to the Boards’ purview which is wrong in law. The licences had lapsed, for they were not renewed by the appropriate authority, the Minister. In the circumstances which I have recounted about the Board’s deliberations the new Minister cannot be said to have been properly appraised of the status of these "applications" and his purported "act" in renewing, based on factual inaccuracies and in breach of the Act cannot stand.
I make declaration that the decision of the Minister Bouro to renew the licenses of Pacrim is an improper exercise of power by the Minister and it is by order of certiorari brought up and quashed. It follows and I so declare that the purported "renewed licences" are invalid and unlawful. The earlier injunction affecting Pacrim is made absolute.
Further Sumitomo seeks to quash the decision of the Board by writ of certiorari. It relies on errors on the face of the record. The errors relate to:
Whilst the Act, by s. 20(1) provides for applications to be made "to the Director in the prescribed form" it stretches credulity to suggest that the "prescribed form" must personally be received by the Director’s hands. Such an interpretation is wrong when the words of the Section do not carry such connotation. This pro forma, addressed to the Director presumes perhaps an obligation on the administration officers of the Department to bring such prescribed form before him but that obligation is not on Sumitomo; rather its obligation is to address the prescribed form "to the Director".
To misapprehend its principal duty to consider prospecting applications by reference to the possible risk "(of) legal challenge that may incur (sic) over these areas" in the absence of any court order by way of injunction, for instance is clear error on the face of the record. Again, to justify refusal to consider the applications of Sumitomo (which I am satisfied should properly have been before the Board) by pleading that the areas of interest "are subject to existing prospecting licences" is wrong in fact.
The Board’s decision to refuse to table or otherwise consider Sumitomo’s applications to prospect is by way of certiorari brought up and quashed. My powers are found in Order 62.
There remains the argument over Sumitomo’s priority of application, for the Board by its minutes of 16 December 2005, spoke of asking Mr. Qopoto to prepare the Bugotu Nickel Project for international tender. That may be seen as a "determination" of the Board amenable to review. On the evidence of Mr. Dennis McGuire an existing pending application to prospect has been lodged by Sumitomo, in terms of s. 20 of the Act. The Section does not envisage Nickel Projects for international tender rather it provides for "prescribed form" of tender by way of application. Sumitomo has prima face such an application lodged. For abundance of caution I will call up and quash the determination of the Board purporting to direct Mr. Qopoto to call for international tender for that it risks again diverting the Board and its Chairman from its primary duty to consider applications in accordance with the Act and I would be remiss were I to fail to grant Sumitomo relief in terms which will effectuate such relief and which apprehends proper process in the Boards deliberation. I should say s. 20(5)(6) touches on "priority" of applications but having accepted the fact of the proper lodgment of the applications by Sumitomo, the process of such applications lies with the Director. In terms of Sumitomo’s claim for relief, I direct the applications of Sumitomo go back before the Minerals Board to be dealt with in accordance with law with priority to time of lodgment.
I give liberty to apply.
THE COURT
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