Laperouse Restarant Company Ltd v Attorney General [2017] SBHC 22; HCSI-CC 82 of 2014 (19 April 2017)

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AND: ATTORNEY-GENERAL First Representing the Commissioner of Lands and Defendant
Registrar of Titles)

AND: NAZAR GOLD SI LIMITED Second Defendant

BETWEEN: PETER FAKAIA, ROPERT WASI, ALICK Claimants
FAKAIA and GEORGE ABANA.
(as Trustees and Representatives for the Olufera
Clan)

Mr G.Suri for Claimant in CC No. 82 of 2014, and Second Defendant in CC No 45 of 2006
Mr J. Muria (Jnr) for First Defendant in CC No. 82 of 2014, and Third Defendant in CC No. 45 of 2016
Mr J. Ivanesivic and M. Pitakaka for Second Defendant in CC No. 82 of 2014 and for First Defendant in CC No. 294 of 2014, and for First Defendant in CC No. 45 of 2016
Mr J. Sullivan QC and Mr E. Soma for the Claimant in CC No. 294 of 2014

Faukona PJ: By consensus all the three cases were consolidated and are to be heard together by order of Court made on 14^th April 2016. Under the order, the principle that determination in one case will affect the others is acknowledged and adopted.

2.	There are two applications to be determined. One was filed by the Claimant in Civil Case No. 82 of 2014 on 10^th November 2016, and it was an application for leave to amend the claim. The other application was filed by the second Defendant in the same case, on 14^th November 2016, and it was an application to dismiss the claim or for summary judgment.

3.	Mr Suri in his submission made clear that his application for leave was in response to the second Defendant’s application for dismissal or summary judgment.

4.	On the outset, it would be proper and relevant that only the parties in Civil Case No. 82 of 2014 are obliged to engage in submissions as both applications concern one and the same cause of action. However, in normal circumstances that should be the case. In these proceedings three claims were consolidated and the principal that determination in one case will affect the other, whether in respect to interlocutory issues or in substantial issues.

5.	Therefore, on that basis I ruled that Mr Sullivan QC and Mr Soma have the standing to contribute to the submissions although their client is not a party to that proceeding.

	Brief Facts:

6.	From submissions the following facts are most relevant and undisputed.

7.	Laperouse was incorporated on 15^th August 1986 under the former Companies Act, under the name Tourism Development Company Limited. A month later it became the registered owner of PN-191-014-100. The registered business name of Tourism Development changed its name to Laperouse in 1993, which change was not on the fixed term estate register for PN-191-014-100.

8.	In October 1993, under the new name was the registered owner of FTE in PN-191-014-121. As the owner of the first registered land clause 4 of the first schedule to the Grant required Laperouse to use the land for tourism development, for a French Restaurant, bar, tea room and tourist shop.

9.	Concerning the second land, by clause 4 of the first schedule of the Grant, Laperouse was to use the land for a car park and an open space.

10.	In regards to clause 6 of the first Schedule, Laperouse was required to build (the restaurant) within 24 months for a minimum cost of $30,00 in accordance with the provisions of the Public Health Ordinance or By-laws of the Local Government Ordinance. In respect to Clause 6 concerning the second FTE Laperouse was required to construct a building in accordance with provisions of the Public Health Ordinance or any By-laws under the Local Government Ordinance.

11.	On 31 August 2012 the Commissioner of Lands signed a document entitled “Notice of Re-entry” stating that Laperous had failed to comply with a “Notice before forfeiture” dated 1^st May 2012 made pursuant to S. 138 of the Land and Titles Act. And also stated that the Commissioner through its agent re-enter and take possession of PN: 191-014-100 pursuant to S.136 of the Land and Titles Act.

12.	Also on 31^st August 2012, the Commissioner of Lands signed another document similar to one before with identical terms in respect of PN: 191-014-121.

13.	Nazar was incorporated on 25 September 2013. On 27^th November 2013 Nazar was registered as the owner of the two estates pursuant to a Deed of Grant on the same date.

14.	On the same date too the registration of Laperouse as the holder of those fixed term estates was cancelled.

15.	Laperouse was then re-registered under the new Companies Act on 20^th March 2014 and a certificate of re-registration was issued to that effect.

	The law on dismissal of claim or Summary Judgment

16.	The application for dismissal or summary judgment was based on Rule 9.58 to dismiss the amended claim filed by the Claimant pursuant to rule 9.75 of Solomon Islands Court (Civil Procedure) Rules 2007.

17.	Rule 9.75 spells out that a claim can be dismissed generally or in relation that claim if it appears to the Court the proceedings are (a) frivolous or vexatious or (b) no reasonable cause of action disclosed or (c) the proceedings are an abuse of Court process.

18.	Apart from Rule 9.75, Rule 9.76 states the Court may receive evidence on the hearing of an application for an order under Rule 9.75.

19.	The test to be applied when considering such application under Rule 9.75 was considered in Court of Appeal Case in Saogahtoga V Mugaba Atoll Resources Company^[1] with the exception of power now given, there is no real prospect of any part of the amended claim succeeding. The purpose of summary procedures is a “Cost Saving” mechanism.

20.	Indeed that is the second Defendant’s assessment of the Claimants amended claim and the statement of case after it filed its defence, and where it believes there is no prospects of any part of the claim succeeding, see rule 9.58.

21.	My perception of the ratio quoted in the above case is a combination of various views, putting into perspective the natural and literal meaning of the tests to be applied culminated and derived from rule 9.75. The most minimal test to apply in my view is grounded in the case of Moore V Lawson, that so long as the statement of claim discloses some cause of action, or raise some question fit to be decided at trial, and importantly the mere fact it is weak and not likely to succeed is no ground for striking out. That statement of authority sets down the minimal approach to the extent that it may dilute the statement in Gatu and Ma’uana cases which require a cause of action with some chance of success or where a tenable case has been disclosed.
22.	To determine whether a cause of action has some chance of success or likely to succeed, the Court has to consider evidence to be able to conclude. On the other front, the paragraph also advocates the prospect of disclosing some cause of action or raises some question to be decided. Those requirements in my view would mean one arguable point or one question raised and fit to be decided is sufficient to call for a trial. Even if it is weak or not likely to succeed the case by rule 9.76, they still accurately summarise the factors a court should consider in an application to strike out. The relevant passage omitting the reference to Wenlock V Moloney, bear repeating,

		“the Court should only exercise its discretion to strike out in ‘plain and obvious’ Cases (Habbuck & Sons V Wilkinson [1898] UKLawRpKQB 176; (1899) 1 QB 86) and where no reasonable amendment would cure the defect. Such an application is only appropriate where it is clear that the statement of claim as it stands is insufficient, even if proved, to entitle the plaintiff to what he asks (Chow V Attorney General SBH CC 127/00). A reasonable cause of action means basically a cause of action with some chance of success or where a tenable case has been disclosed for the relief sought (Gatu V SIEA and Ors SBC CC 59/95; Ma’uana V Solomon Taiyo SBNC CC 109/97). As long as the statement of claim discloses some cause of action, or raises some question fit to be decided by trial, the mere fact it is weak and not likely to succeed is no ground for striking out (Moore V Lawson (1915) 3 TLR 418). If however, it is found that the alleged cause of action is certain to fail the statement of claim should be struck out (Drummond Jackson V BMA (19700 1 WLR 688.”

23.	The second Defendant submits that the amended claim and the statement of case in support cannot be rectified by amendment even if accepted; the cause of action is doom to fail.

24.	The subject of this case concern two fixed term estates located in Honiara. One is PN-191-014-100, subject land part A and the other is PN 191-014-121.

	The caveat declaration:

25.	The argument by the second Defendant commences by reference to Section 220 (1) of the Land and Titles Act which states (a) claims of an interest in registered land or the agent of such person.

26.	The core argument as it seems suggested that at law a company that is “not registered does not exist, as such is not a person at law”. Therefore, the FTEs which were once registered to Laperouse were vested in the Crown on the day of removal. It does not matter whether Laperouse was re-registered later or not the interest claim must both exist at that time the caveat was lodged (it did not) as the caveat cannot be lodged by non-existence people who do not have present interest in land, even by an agent.

27.	It does not matter if the Caveat was lodged by an agent. The fact is that a person cannot be an agent of a non-existence principle who by S.220 of Land and titles Act must exist and must claim interest in the registered land.

28.	By its tone the argument by the Counsel for the second Defendant premise on whether the Claimant should succeed on this point at trial.

29.	Mr Suri argues that Regulation 11(3) empowers the Registrar of Companies to extend the period for re-registration and that S.210 of the Act imposes penalty of removal for none registration within 9 months. However, S.210 of the same Act does not prohibit a removed Company from applying for restoration.

30.	Once a removed Company has been restored by S.210 (8) a Certificate of Registration is issued and is conclusive evidence that all requirements as to re-registration have been complied with and a date of re-registration is stated in the certificate.

31.	Apart from that, Mr Suri also relies on S.151 which says a Company restored is deemed to have continued in existence as if it had not been removed, and S.152 affirms a property of the Company which was vested in the Crown at that time it restored to the register vest in the Company on its re-registration to the register as if the company had not been removed from the register.

32.	And S.146 of the Companies Act states that property vested in the Crown is not completed until the requirements of S.146 (3) – (6) are fully completed. For instance S. 146(3) requires the Minister to give public notice of the vesting.

33.	Mr Sullivan QC summed up in his submission that Nazar’s position in the current state of consolidation of proceedings is misconceived.

34.	The basic argument by Mr Sullivan QC is that Nazar cannot rely on S.146 of the Act that upon removal from the register under S.210 of the Act, Laperouse properties vested in the Crown. But on restoration to the register under reg.11(4), Sections 151(2) and 152 have no application, because Laperouse was removed under S.140. He pause either Sections 146, 151 and 152 apply to all removals and restorations or they apply only to removals under S.140 and later restoration of companies.

35.	If the later, then Laperouse fixed term estate had never vested in the Crown because S.146 does not operate and S.210 is silent.

36.	In the alternative, if S.146 applies to S.210 removals for failure to register, then Sections 151 or 152 equally apply to S.210 restoration made under reg11 (4). In that case S.151(2) provides that Laperouse is deemed to have continued in existence as it never been removed, and S.152(1) provides that property that may have vested in the Crown vests in Laperouse as it had never removed from the register. If it is to be treated as so, then its property is to be treated as never having been vested in the Crown at all.



37.	Mr Sullivan QC continues to submit that none of the exceptions in S.152 apply. No Court order was made for compensation under S.146(4)(b), so S.152(2) has no application. The transmission of the fixed term estates to the Crown was never registered so Sections 152 (3) and (4) has no application. Indeed Laperouse continued to be registered as holder of the estates until their cancellation with Nazar’s registration.

38.	From the submissions there is need to simplify the core issue of interest as spell out by S.220 (1) the Lands and Titles Act and whether that interest continue to exist in law even after an incorporated company had been removed from the Solomon Islands Company register.

39.	It is irrelevant to attempt to persuade the parties to acknowledge that there are two kinds of removal from the register. One is advocated by S.142 of the Companies Act 2009 where a company has failed to file its annual report within a period of 6 months, if not should be removed. The second removal is provided for by S. 210 (1) and (2) of the same Act where an existing company fails to register within 9 months under the new Companies Act 2009, hence should be removed.

40.	That does not end there, the Act also provides for restoration of those companies which were removed in both circumstances.

41.	In this case Laperouse was removed under S.210 and not under S.140. S.146 (1) put into perspective that a property of a company removed from the register under S.140 vests in the Crown with effect from removal. That section is aligned to the rest of the sections under the same heading “remove from register.” And is directly linked to S. 140. Therefore it could be misconceived to say and rely on S.146 that upon removal from the register under S.210, Laperouse property was vested in the Crown. But on restoration to have no application because it was not removed under S.140.

42.	The question is whether Sections 146, 151 and 152 each applies to all removals and restorations, or they apply to removals under S.140 only and later restorations of the companies.

43.	If those sections apply only to removals under S.146 then Laperouse fixed term estates never vested in the Crown and Nazar’s argument is not legitimate in that sense.

44.	In my opinion S. 146 and S. 152 applies to removal under S.140. Whereby upon restoration the property of a company which had been vested in the Crown upon removal, vests in the company on its restoration to the register as if the company had not been removed from the register.

45.	One feature about restoration of a company removed under S.140 is that any property vested in the Crown under S.146, if a Court has made an order for payment of Compensation to any person, then there can be no vestment of the property to the Company on restoration pursuant to S. 152 (2), the property becomes the property of the Commissioner and can be dealt with under its powers even to dispose it off. This does not affect Laperouse in this case.

46.	In relation to S.151(2) it does directly refers to removal under S. 210. It may by way of implication apply to removal under S.146 as well. However in the case of Laperouse, S.151(2) provides Laperouse is deemed to have continued in existence as if it had never been removed. Section 151(1) is an evidence of restoration when a notice is registered stating that the company is restored.

47.	In Summary Laperouse was removed by virtue of S.210, hence, the law in terms of Section 146 cannot apply to it. Upon restoration made under regulation 11(4), Sections 151 and 152 must be applied. There is no property own by Laperouse ever vested in the Crown upon removal, pursuant to the above provisions, as Laperouse is deemed to have continued in existence as it had never been removed.

48.	Therefore the argument that the fixed term estates vested in the Crown by reason of Laperouse’s failure to re-register cannot prevail or succeed.

49.	Am afraid in using the word “succeed” at this stage, because it may pre-empt any decision later. However, the Counsel for the second Defendant is keen in using such word. Not only that, but Rule 9.61(b) require application for summary judgment must have a sworn statement which states that there is no real prospect of any part of the claim succeeding. Other issues related to removal, vestment and restoration.

50.	There are certain number of related issues in respect of removal, vestment and restoration of properties. The most outstanding one is whether the agent of Laperouse was formally appointed or not. It is an issue in any sense minor, but quite important, because of the issue of validity of agency representation.

51.	There is also another important issue why Laperouse had failed to be re-registered within time limit under S.210, and the consequences due to it as a result. This cannot be determined now and since the application for determination on point of law has not been pursued, it is therefore relevant that the issue be heard at trial as well.

	Forfeiture and resumption:

52.	The argument by the Counsel for the second Defendant on this issue assumed on the basis that the effect of S. 146 of Land and Titles Act and fixed term estates ceased to subsist when Commissioner of Lands re-entered and recovered possession of the land and has become entitled to be registered as the owner. Therefore has power under S.4(4) of the Land Title Act to deal in interest in the lands. Hence it does not matter whether forfeiture notices and re-entry notices were issued or not, it does not matter whether Laperouse was later reinstated. Hence the Commissioner of Lands has granted new fixed term estates in respect of these Lands.

53.	The Counsel also advocates that there is no basis to seek rectification of the register or compensation under S. 229 of the Land and Titles Act.

54.	The entire case for the second Defendant is an argument constructively base on the fact that the Claimant has no prospect of succeeding hence the claim should be dismissed. There is no second thought ever to be diagnosed in the entire submissions in respect of cause of action, in terms of issues, that has to be heard at trial.

55.	In turning to this very issue the foundation of it has been determined above and all the arguments submitted in support of this, is one of waters under the bridge now.

56.	Therefore it is pertinent I make reference to Mr Sullivan QC’s submissions at paragraph 44 which he submits and raises the issues of forfeiture and fraud/mistake, under which there are numerous factual disputes, which impinge on the various proposed preliminary question. None can any of these be determined before trial.

57.	Mr Sullivan further submits that even if there were grounds for the Commissioner of Lands to give a notice under S.138 of the Land and Titles Act, the starting point for any forfeiture process is a matter of evidence, the giving of any such notice is itself a matter of factual dispute on the pleadings, see Claim at paragraphs 11.2 and 12 (a), Crown defence paragraphs 11 and 12, Nazar Defence paragraphs 9 and 10. That issue can only be dealt with at trail.

58.	Other issues raise in connection with the forfeiture process, is whether there was a re-entry and retention of possession under S.136 (2) (a), see claim at paragraph 12 (b); there is relevant issue in adverse possession proceedings in CC 294/14 and 45/16; whether the conduct of the Commissioner amounted to unlawful resumption, see Claim paragraph 13; whether officers of the Crown have acted improperly and unlawfully, see Claim paragraph 14; whether there was fraudulent conduct, see Claim paragraph 15 A; whether Nazar caused or contributed to the result complained of, see claim paragraph 16. Those matters are all in dispute on the pleadings. None of these can be determined until after trial and the hearing of evidence.

59.	On the process of forfeiture above there are number of factual dispute which have to be determined after trial. I agree with Mr Sullivan QC for pointing out exact paragraphs in the pleadings that comprise contest of facts.

60.	Mr Suri submits at paragraph 7.4 that there is real genuine and reasonable cause of action for trial based on claims of two kinds of fraud; fraud arising by reason of error of law and fraud arising by reason of money bribe. They are serious issues for inquiring at trail.



61.	The rest of Mr Suri’s submissions are based on questions of law concerning application and qualifications under the Companies Act and Regulations and the Land and Titles Act. Those I have taken into account when I determine the issue related to interest entrench in Section 221 of the Lands and Titles Act. However, Mr Suri further argues that the caveat was removed from the register was because of bribery or money fraud and reference was made to Mr Manaisi’s sworn statement. On the other hand Nazar argues that the removal of caveat was proper. Again it is an issue of removal of the caveat which can be determined at trial.

62.	Further still, there is argument by Mr Suri that the caveat was not given reasonable notice to substantiate his claim. Even if it was given, the cause of concern by the Registrar must be stated. Again it’s another issue to be heard at trial.

	Public right of way:

63.	There is nothing much in submissions filed by other Counsels in respect to this issue. However, the Counsel for the second Defendant had canvassed as it is one of the reliefs sought by the claim.

64.	From the submissions it would appear arguments are premised on S. 185 of the Land and Titles Act, whether the Commissioner of Lands has the ability by discretionary or mandatory to create right of way. Secondly is a reference to S. 186(2) of the same Act, which raises the issue whether the Court ought to interfere with the discretionary power exercise by the Commissioner, other than by way of judicial review.

65.	In connection is the question whether the right of way sought will benefit the public or connected with public terminal, and whether there is ground or valid reason for the exercise of discretion to create public right of way.

66.	Since Mr Suri does not canvass those issues in his submissions, they must be permitted as a cause of action to be tried at the hearing.

67.	Again the issue is one not so much on facts but of law. I perceived it was raised to negative the Claimants prospect of succeeding or part thereof, so far as the issue of right of public way is concerned. I am reluctant to decide on any issue of law now, as the application for early determination on the issue of law had not been pursued. However, I accept the view to discredit any prospect of success at this stage. In any event I will let the issue pass through and be determined after trail.

68.	The major issue in this particular application is for dismissal or for summary judgment relates to the interest or standing by the Claimant which is based on the process of its removal from the Solomon Islands register and its re-registration and the status of the properties it owns. However this pertinent issue has been decided against the second Defendant as above. Therefore the second Defendant’s application for dismissal or for summary judgment ought to be dismissed.

	Application for leave to amend the claim:

69.	This application was filed pursuant to, Rule 5.34 in consolidation with Rules 5.3 and 5.4 of the Civil Procedure Rules (Court Rules) 2007. In the application the Claimant relies on paragraph 21 (c) and (d) of the claim as pleading bribery or money fraud. However the style of pleading merely states that the Claimant will prove at trial evidence of bribery or money fraud. After the sworn statement of Mr Maniasi filed in 14^th April 2016, the Claimant thought that money fraud itself must be pleaded as specific claim or cause of action, therefore proposes that amendment now is to plead “money fraud” as a specific claim or a cause of action.

70.	Further the bribery or money fraud which Claimant wish to include in Civil Case No. 82 of 2014 has already been pleaded and particularised in Civil Case No. 294 of 2014 under paragraph 8.5 of the Defence by Laperouse. And the particulars of fraud have been pleaded under paragraph 8 of the Defence filed on 15^th August 2016 in Civil Case No. 45 of 2016.

71.	Hence, no party should be prejudiced by any such amendment.

72.	Counsel for the Attorney-General has no issue with the application for leave to amend the claim filed by Laperouse.

73.	Mr Sullivan submits that at this stage Nazar is yet to plead any defence under S. 229 (2) although of course it must have opportunity to amend its defence assuming leave is granted to Laperouse to amend. However, any possible defence under S. 229 (2) will raise further issues for trail. As framed in the pleading this is not a proceeding which can be determined summarily.

74.	It appears that Mr Sullivan QC has no problem with the application by Laperouse for leave to amend its claim.

75.	Unfortunately, there are no submissions by the second Defendant in respect of Laperouse application for leave to amend its claim. Therefore I take it has conceded to the application. I must therefore grant leave for Laperouse to amend its claim.

	Orders:

	1.		Application for dismissal of claim or for summary judgment refused and dismissed.

	2.		Application for leave by Laperouse granted and that amended claim be filed by 28/4/2017.

	3.		That case adjourns to 11^th May 2017 for mention so as to resume to case management.

	4.		Costs of these applications are to be paid by Nazar Gold SI Limited to Laperouse, Honiara Resort (Solomon) Limited with certification for Queen Counsel, and to the Attorney General.



	The Court.

High Court of Solomon Islands

Laperouse Restarant Company Ltd v Attorney General [2017] SBHC 22; HCSI-CC 82 of 2014 (19 April 2017)