Home | Databases | WorldLII | Search | Feedback High Court of Solomon Islands

Bank South Pacific Financial Group Ltd v Douglas Industrial & Logistics (SI) Ltd [2023] SBHC 93; HCSI-CC 656 of 2021 (27 July 2023)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 656 of 2021

BETWEEN

BANK SOUTH PACIFIC FINANCIAL GROUP LIMITED
Enforcement Creditor

AND:

DOUGLAS INDUSTRIAL & LOGISTICS (SI) LIMITED
First Enforcement Defendant

AND:

KEITH DOUGLAS
Second Enforcement Defendant

AND:

DOUGLAS SALVAGE & TOWAGE (SI) LIMITED
Third Enforcement Defendant

AND:

DALGRO (SI) LIMITED
Fourth Enforcement Defendants

AND:

REGINALD DOUGLAS
Fifth Enforcement Defendant

Date of Hearing: 29 June 2023
Date of Ruling: 27 July 2023

Mr A Radclyffe for the Enforcement Creditor
Mr C Hapa for the First, Second, Third, Fourth and Fifth Enforcement Defendants

Ruling

1. On 10 May 2022 judgment was entered unopposed in favour of the Judgment Creditor by the Registrar. The judgment included an order that three properties being FTE 191-041-99, FTE 191-008-135 and FTE 191-008-136 be sold by tender. The fixed term estate for the first of those properties was held by the First Defendant and the fixed term estate for the second and third of the properties was held by the Second Defendant. On 15 September 2022 the Enforcement Creditor applied for order seeking leave to sell the three properties. The application was made following the tender process that had been undertaken as set out in the judgment.
2. The Enforcement Creditor was able to obtain an offer for the fixed term estate for the first property in the sum of $8,200,000.00. For the second property the offer was for $1,105,000.00 and the third was for $3,400,000.00.
3. On 27 January 2023 the Court granted the application in the following terms:
   • "1 Leave is granted for the Claimant to sell the First Defendant’s fixed term estate in

Parcel No 191-041-99 to Leta (SI) Ltd for $8,200.000.00.

2. That the Defendants and any other occupants of Parcel No 191-041-99 vacate the same

immediately.

3. Leave is granted for the Claimant to sell the Second Defendant’s fixed term estate in Parcel No

191-008-136 to Anthony Sullivan for $1,105,000.00.

4. Leave is granted to sell the Second Defendant’s fixed term estate in Parcel No: 191-008-136 to

Leta (SI) Ltd for $3,400,000.00.

5. That the Registrar sign the transfers for the Respective Defendants
6. That the Defendants and any other occupants of Parcel No: 191-008-135 vacate the same immediately.
7. That the Defendants pay the costs of the application.”
4. On 14 April 2023 the Defendants filed an application to set aside orders 1, 2, 4 and 5 of the Enforcement Orders made on 27 January 2023.
5. In detailed submissions filed in support of the application, counsel for the Defendants refers to valuation reports for the first and third properties dated 23 February 2017 and 23 June 2017 respectively. The sworn statement of Reginald Douglas (the Fifth Defendant), filed on 14 April 2023 refers to the third property being FTE 191-008-136. Annexed to that sworn statement is a copy of a valuation report under cover of a letter dated 16 June 2017 prepared on the instruction of Keith Douglas (the First Defendant). The valuer expressed the opinion that at that time the property had an estimated market value of $4,328,000.00. That was the only valuation report put before the Court. Counsel has asserted that the first property, being FTE 191-041-99 had a market value of $12,535,000.00 but has not placed any valuation report before the Court.
6. It is apparent that an opinion of the value of the properties is of necessity a judgment made at that time. Properties can have values that may increase or decrease. This is particularly so in Honiara since the outbreak of the COVID-19 global pandemic and the effect that it has had on commercial businesses.
7. The best indication of what a property may be worth is what a purchaser is prepared to pay. It is for that reason that properties are offered for sale by tender. Counsel submits that the valuations ought to have been placed before the Court and if they had the Court would not have granted the orders made on 27 January 2023.
8. Counsel submits that the difference between the offers received and the 6 years old valuations is such that the properties should be put for tender once more. There is nothing before the Court that persuades the Court that a greater offer may be received if the tender process in repeated. There has been no explanation why the first property has not been vacated in breach of the orders. It appears that the Defendants fell into arrears and have not taken steps to find a buyer for a higher price since these proceedings were commenced in 2021. That is a clear indication that the submission that the properties are have a greater value than has been offered does not have substance.
9. At paragraph 13 of counsel’s submissions, counsel has asserted that had the valuation reports been placed before the Court, the Court would have decided whether or not to proceed with the sale of the lands. Counsel draws the Court’s attention to section 17(2) (a) of the Land and Titles Act and correctly submits that the Court has a discretion whether or not to approve the proposed sales.
10. The fact that the best offer received following tender processes and the fact that the Defendants have not found a buyer willing to pay a higher price since the proceedings were commenced and the fact that they have not vacated the premises persuade the Courts that the Application is merely delaying the inevitable and accordingly it should be dismissed.

Orders

1. Application to set aside the orders 1, 2, 4 and 5 made on 27 January 2023 is refused.
2. The Defendants are to pay the costs of the Application on the standard basis.

By the Court
Hon. Justice Howard Lawry
Puisne Judge