Stephens v Attorney-General (Majority Judgment) [1998] FJSC 6; CBV0002U.1996S (12 March 1998)

Fiji Islands - Stephens v AG (Majority Judgment) - Pacific Law Materials

IN THE SUPREME COURT OF FIJI

AT SUVA

ON APPEAL FROM THE FIJI COURT OF APPEAL

CIVIL APPEAL NO. CBV0002 OF 1996S
(Fiji Court of Appeal Civil Appeal No. ABU0064/92S)

BETWEEN:

:

ANTHONY FREDERICK STEPHENS
Appellant

AND:

THE ATTORNEY-GENERAL

Coram: Tn. Sir TimocTimoci Tuii Tuivaga, President
The Rt. Hon. Lord Cooke of Thorndon
The Hon. Sir Anthony Mason

Hearing: 12 March, 1998
Judgment: March, 1998

Counsel: Mr. R. Douglas Q.C., Mr. G. P. Lala and Mr. K. Vuataki for the Appellant
Mr. D. Singh for the Respondent

JUDGMENT OF SIR TIMOCI TUIVAGA, CHIEF JUSTICE,
AND LORD COOKE OF THORNDON

This appeal was filed four days out of time, apparently because of an incorrect belief that the 42 days for giving notice of appeal under rule 4(3) of the Supreme Court Rules 1991 runs from the date of perfection by sealed order of the decision appealed from rather than the date of the decision itself. In the history of the case four days is insignificant and the necessary extension of time under rule 21(4) has been granted.

The case concerns a purported deed of settlement dated 17 September 1992 between Anthony Frederick Stephens and the Attorney-General of Fiji. The purported settlement is of two actions (No. 34 of 1989 and No. 134 of 1991) by Stephens against the Attorney-General as nominal defendant, arising out of the arrest and detention of the plaintiff by the Fiji police. The 1989 action was linked with a conviction of the plaintiff on 31 August 1988 in the Magistrate’s Court at Nausori, when he pleaded guilty to a charge of having in November 1987 at Nairai Island possession of a pen pistol and eight rounds of ammunition without holding a licence. He was sentenced to eighteen months’ imprisonment. In error the charge referred to section 4(2)(b) of the Arms and Ammunition Act (Cap. 188) which creates the lesser offence of possession otherwise than in accordance with the conditions of a licence. The reference should have been to section 4(2)(a)(ii). But Fatiaki J., after granting him bail on 28 September 1988, allowed his appeal on that technical ground on 14 October 1988. The plaintiff claims that he was detained for 40 days before the Magistrate’s Court hearing and for 28 days in prison thereafter. He makes various allegations of ill treatment and unlawful conduct against the police and claims $30 million damages.

The 1991 action relates to the forcible entry of the police on 2 February 1991 at about 6:00am into the plaintiff’s house and his detention until about 10:30pm on suspicion of involvement in an armed robbery. Again there are various allegations about the conduct of the police. The plaintiff claims unliquidated damages including exemplary damages.

This Court is not now concerned with either of the above episodes. We mention them only as background to the issues with which we have to deal.

The purported deed provides for settlement of the two actions by the defendant making a cash payment of $980,000 to the plaintiff; and by the defendant further settling and having discharged certain mortgages over a Crown lease to Home Finance Co. Limited and the National Bank of Fiji: settling with A.N.Z. Banking Group Limited all claims made by the Bank against the plaintiff pursuant to a certain guarantee: settling all debts filed with the Official Receiver pursuant to a receiving order made against the plaintiff in a 1991 bankruptcy action, and having the receiving order discharged; settling all matters requiring to be settled in respect of certain lands formerly owned by the plaintiff’s family, and having the land transferred to the plaintiff: and having certain plantations on the Island of Taveuni under the control of the National Bank of Fiji transferred to the plaintiff. There are provisions that all the settlements are to be free of tax and encumbrances.

On 18 October 1992 the Solicitor-General wrote to the plaintiff’s solicitors denying any liability on the part of the Government under the deed, and saying that the deed was legally unenforceable and that the cases purported to have been settled were still pending. It is common knowledge and this Court is entitled to take judicial notice of the fact that, following a resolution by the House of Representatives, in 1993 the President of Fiji appointed Sir Ronald Kermode as the sole Commissioner of a Commission of Inquiry into the events surrounding the signing of the deed, and that the Commissioner held an inquiry and reported. It is at best doubtful, however, whether a court can take judicial notice of the contents of the report or whether it is admissible in evidence in court proceedings. Accordingly we do not refer to its contents.

On 22 October 1992 the plaintiff issued in the High Court of Fiji an originating summons against the Attorney-General seeking a declaration that the deed constituted a valid and binding agreement. A brief supporting affidavit was sworn by the plaintiff on 21 October 1992. Among other things he stated that the deed had been signed by the Attorney-General and himself in the presence of the Hon. Ratu Osea Gavidi, the Hon. Mosese Tuisawau and the Hon. Sakeasi Butadroka. The former Attorney-General (he had ceased to hold that office on 5 October 1992) Apaitia Vute Manatoto Seru swore an affidavit in response on 19 November 1992. In reply there were filed a further affidavit by the plaintiff, sworn on 24 November 1992, and an affidavit by Ratu Osea Gavidi, also sworn on that day. These four affidavits constituted the only evidence before the High Court and the Court of Appeal. We will refer to their contents later.

The originating summons came on for hearing before Scott J. In his judgment, delivered on 16 December 1992, the Judge declined to grant the declaration sought. After noting that it might be argued that determining the status of the deed must involve the resolution of contentious issues of fact, he said that he was able to determine the sole issue before him taking as a foundation facts that were not in issue. He gave a number of reasons for the determination at which he arrived on that issue, among which we note that he said that the Attorney-General does not have an unlimited mandate to incur Government expenditure and has no authority to enter into settlements of legal proceedings against the Government to be charged upon the Consolidated Fund without appropriation; and also that the deed was impossible of performance because the lands specified in it did not belong to the State. He held moreover that the deed was void as against public policy. Parliament, he said, had not approved the settlement, the money of taxpayers was involved, ‘... there must be serious doubt whether such a colossal financial settlement can possibly be in the public and in particular the taxpayers’ interest’.

The plaintiff’s appeal from that decision was not brought on for hearing before the Court of Appeal until 26 August 1996. In their judgment, delivered on 4 October 1996, the Court (Sir Moti Tikaram P., Savage and Hillyer JJ.A.) described the story as astonishing. In view of the contents of the affidavits, they thought that this was certainly not a case that was appropriate to be commenced by originating summons, and that it would have been better if the High Court Judge had ordered under Order 28 r.9(1) that the proceedings should continue as if begun by writ. They recorded that Mr Douglas for the plaintiff had accepted before them that the proceedings would have been better so tried, and had indicated that, if the appeal was allowed, the Court should direct that the case return to the High Court and be tried at a hearing with witnesses giving their evidence orally. At this point we interpolate that it was very late in the day for the plaintiff to be making that suggestion.

In the circumstances, however, the Court of Appeal went on to deal with the appeal on the basis upon which the High Court Judge had dealt with the case. We summarise their reasoning only briefly. They pointed out that section 82(1) of the Constitution vests the executive authority of Fiji in the President and makes it exerciseable by him or by the Cabinet or any Minister authorised by Cabinet. They said that there was no evidence of any express authorisation by Cabinet for the Attorney-General to execute such a contract, nor did it come within the responsibilities of any department which he administered. In their view, it was clear that it was not established that the Attorney-General had actual authority to execute the deed.

Describing ostensible authority as the main thrust of Mr Douglas’ argument, they accepted that there was strength in the submission that express Parliamentary appropriation of finance was not required for the validity of a contract. It was enough if there was a Parliamentary grant for the class of service to which the contract related. The Attorney-General was not responsible for the police. The Prime Minister as Minister of Home Affairs may have been responsible for the police and had taken part in certain discussions, but the evidence did not suggest to them that the Attorney-General was authorised by the Prime Minister to act for him in his capacity of Minister of Home Affairs.

The Court of Appeal continued that to make out a case of ostensible authority it was essential that the other party to the transaction believed it to be within the agent’s actual authority. But a draft letter, in the form of a letter from the Government to the plaintiff, which the plaintiff had handed the Attorney-General on 10 July 1992 had included the passage ‘You will realise that because of the amount claimed and the exceptional circumstances surrounding your claim final approval lies with the Prime Minister and Cabinet’. Hence the plaintiff could not have believed that the Attorney-General was acting within his authority in settling. Moreover, the quantum of the settlement (at least in excess of $2 million) must have appeared to the plaintiff himself somewhat disproportionate to compensate for 68 days’ detention. Accordingly they also rejected ostensible authority.

The Court of Appeal concluded with some points about Scott J.’s reasoning. Of these points it suffices for us to mention two. First, the Court of Appeal accepted his finding of impossibility of performance, adding that severance of the clauses concerning lands could not properly be ordered without evidence of the value of the lands, so that the effect of severance on the contract as a whole could be considered. Secondly, while refraining from a discussion of the question of public policy, they said that they would need considerable argument to satisfy them that it had application in these circumstances.

The result in the Court of Appeal was thus that the appeal failed. The plaintiff now appeals to this Court. Before going further into the appeal or making any observations on the reasoning in the judgments of the High Court and the Court of Appeal, we should give the salient parts of the affidavit evidence as it stood before them.

Mr Seru gave a history of approaches to him, over a period from June to September 1992, by the plaintiff himself, lawyers acting for the plaintiff, and Messrs Gavidi, Tuisawau and Butadroka. They wanted him to sign letters to the National Bank of Fiji to further the plaintiff’s application for an overdraft facility by indicating that the Government accepted liability for the plaintiff in his actions and were agreeing to a settlement in the amount of $980,000. Mr Seru did sign two letters on those lines. They also wanted him to sign the deed of settlement. But on 17 September 1992 the plaintiff and the three parliamentarians came to him with a letter to a firm of chartered accountants acting for the plaintiff in which the National Bank said that it regretted to inform the accountants that it had been instructed by the Minister of Finance and Economic Planning that, without the appropriate Government endorsement, it was not able to entertain a certain request for an overdraft facility based on the settlement.

We reproduce in full paragraphs 7 to 10 of Mr Seru’s affidavit -

"7. So far as paragraph 4 of the Plaintiff’s affidavit is concerned, on 28th August 1992 I saw the Plaintiff in my office, together with Honourable Ratu Osea Gavidi, Honourable Mosese Tuisawau and Honourable Sakeasi Butadroka. They showed me a draft deed of settlement which they wished me to sign, it having already been signed by the Plaintiff - I annex hereto marked "C" a copy of this draft deed. After discussions, I agreed to sign a letter (annex "B" of the Plaintiff’s affidavit). This was because I was told by the Plaintiff that he would not seek to enforce any settlement on the Government. He said that he knew the Government did not have the money anyway. He told me that he was involved in a finance deal which would enable money to be made available to Fijians to enable them to engage in commercial activities. The letter was drafted largely on their suggestions.

8. So far as paragraph 5 of the Plaintiff’s affidavit is concerned, I accept that I signed a letter (annex "C" of the Plaintiff’s affidavit). I was approached at home on 9th September 1992 by the Plaintiff and Honourable Ratu Osea Gavidi. I was in a hurry, as I was packing to catch the ferry to go to Kadavu for the provincial council meeting. The Plaintiff insisted that he wanted a letter for the following day. I drafted a letter following their suggestions; they took it away, had it typed, and brought it back for my signature. They added the reference to the Constitution - as I did not have my copy at home with me, I was unable to check it.

9. So far as paragraph 6 of the Plaintiff’s affidavit is concerned, I was approached by the Plaintiff at my office on 17th September 1992 - he came with Honourable Ratu Osea Gavidi, Honourable Mosese Tuisawau and Honourable Sakeasi Butadroka. They showed me the copy of a letter dated 17th September 1992 from National Bank of Fiji addressed to Mr Sultan Ali - I annex hereto marked "D" a copy of this letter. There was a lot of discussion about the matter. I was told that it would assist the National Bank of Fiji to assist the Plaintiff if the draft deed of settlement which they showed me were to be signed by me. The Plaintiff said that I was not to worry about paragraphs 2 to 6 of the schedule of payments and performances in the draft deed of settlement - it was only the first paragraph dealing with the cash payment of $980,000 which was important. He also said that he would not enforce it against the Government. It was drafted in this way to assist the bank. I did not want to sign the draft deed. I told them that I did not have authority to settle the case. I suggested that the word "endorsement" in the letter (annex "D" of my affidavit) meant Cabinet endorsement; and I told them that Cabinet would not agree to it and that it would have to be left to the Court. The Plaintiff then said that the draft deed was simply to assist him in obtaining his finance deal; he realised that

Cabinet would not agree to the proposed settlement; but that all he wanted to do was go away for 3 weeks to complete his finance deal, and once this was arranged, he would come back and withdraw his claim against the Government. On the basis of these assurances from the Plaintiff and his companions, I signed the deed of settlement (annex "D" of the Plaintiff’s affidavit). I did not intend to enter into a legally binding contract with the Plaintiff - I signed the deed because I wished to assist in the process of encouraging the participation of Fijians in business. I accepted the assurances of the Plaintiff that the deed was not to be enforced against the Government because of the presence of his companions - I thought I could trust them, being Members of Parliament. I did not consider the legal implications of the deed, only the political objectives which I thought were laudable.

10. I did not consider that I had entered into a contract with the Plaintiff to settle civil actions 34 of 1989 and 134 of 1991. I will say that I was anxious to remove the pressure that I had experienced from the Plaintiff to settle his cases. I felt that by signing the deed, it would stop his constant pressure; but as a result of the assurances I had received from the Plaintiff at the time of the signing of the deed, I was also protecting the Government from having the deed enforced against it. "

The affidavit of the plaintiff in reply is as important for what it does not say as for what it does say. He accuses the defendant of selecting only some correspondence and events so as to try to create the impression that Mr Seru was coerced or pressured into signing the deed. He denies that this was the case, and says that from early June 1992 there were discussions with the Prime Minister, the Honourable Ratu Etuate Tavai and Mr Seru leading eventually to the signing of the deed. He annexes copies of a considerable number of letters and other documents. He adds that pressure has been applied to him to cancel the deed but he has refused, annexing copies of a further draft and a letter in that connection.

Much of the material annexed to the plaintiff’s affidavit in reply originated from the plaintiff and is self-serving. Far from rebutting the suggestion that Mr Seru was pressured into signing the deed, it tends rather to support that suggestion. But that is not the main point. In our opinion, the main point is that his affidavit makes no reference at all to Mr Seru’s statements that the plaintiff represented to him that the deed would not be enforced. Instead, so it seems to us, the plaintiff in his affidavit attempts to divert attention to the issue of pressure.

Similarly, Mr Gavidi’s affidavit says nothing at all on the question of a representation that the deed would not be enforced. He does say that after various meetings, including some in which the Prime Minister participated, ‘....my parliamentary colleagues Ratu Etuate Tavai and I finally agreed to the terms and conditions that are embodied in the Deed of Settlement of 17th September, 1992 and signed by Mr Anthony Stephens on one hand and Hon. Apaitia Seru for the Government of Fiji on the other.’ There is nothing else in his affidavit which we find of assistance on what we regard as the central issue in this case: absence of an intention of enforceability. This is all the more remarkable when it is noted, not only that Mr Gavidi witnessed the plaintiff’s signature to the deed, but also that, according to Mr Seru, Mr Gavidi was one of those accompanying the plaintiff on both 28 August and 17 September - the occasions when Mr Seru says the representations were made.

In the notice of appeal to this Court, dated 19 November 1996, it was stated that the appellant would seek to adduce fresh evidence on the hearing of the appeal, ‘such evidence not being available to him at the trial of the action’. This fresh evidence was described as -

‘(a) Note or memorandum signed by the Prime Minister re: Anthony Stephens’ case, to the Attorney-General and Minister for Justice dated 27 August 1992.

(b) Note or memorandum signed by Ratu Etuate Tavai, the present Attorney-General, re: Anthony Stephens case, to the Prime Minister dated 26 August 1992'.

The plaintiff swore on 12 February 1998 a supporting affidavit annexing copies of documents answering the above descriptions. Paragraphs 3, 4 and 5 of this affidavit read-

"3. THAT additional evidence referred to therein are reference to the Memorandum dated 26th August, 1992 from Hon. Mr Etuate Tavai now Attorney General of Fiji to Hon. Prime Minister and Memorandum dated 27th August, 1992 from the Honourable The Prime Minister to Mr A. Seru the former Attorney General attached hereto marked "A".

4. THAT said Memorandums were not known to me till I was charged on 30th November, 1994. A copy of the charges is attached herewith marked "B". These documents were given to my lawyers by Prosecution and I had possession of the document after the Judgment of the Fiji Court of Appeal I perused the documents mentioned herein in the grounds of the Appeal.

5. THAT I was not aware of the production of the above documents in Commission of Enquiry that was held in the related matters as I was absent from Fiji and I could not get the records and I was advised that any exhibits produced in Commission of Enquiry cannot be used by me as evidence and I handed the documents mentioned herein to my Solicitors when the appeal to this Honourable Court was being prepared."

For two reasons we think that this application to adduce fresh evidence must be rejected. First, one of the standard requirements for the admission of fresh evidence on appeal is that it could not have been obtained with reasonable diligence at the trial. If the plaintiff, as he should have, had proceeded by writ or had obtained an order that the proceedings be so treated, such documents could have been obtained before the trial by the ordinary process of discovery. Secondly, while it may be that, when considered alone, the documents lend some support to a claim of actual authority (though they would be little or no help on the crucial issue of representations that the deed would not be enforced), they could not satisfactorily be considered alone. It would be necessary to have full evidence of the surrounding circumstances, including any other relevant governmental memoranda. No doubt evidence of the surrounding circumstances will have been considered by the Commission of Inquiry; but the appellant, acting perfectly within his rights in this respect, does not seek to have the Commission’s report placed before the Court.

The real difficulty in the appeal is highlighted by the appellant’s statement of written submissions in this Court. Of the 20 paragraphs comprising the whole document, the opening paragraphs and a good deal of the first 13 are directed to showing that the case was not suitable to be heard on affidavits only and that there ought to have been an order that the proceedings should continue as if they had been begun by writ.

We are of the opinion that it would not be right to try to turn the clock back nearly six years to have a different kind of hearing of this case. The parties - and this applies to both - elected to proceed in the High Court and the Court of Appeal on affidavit evidence. They must live with the consequences. The primary responsibility falls on the plaintiff, who started and had the carriage of the proceedings. Perhaps, if the plaintiff could persuade us that there is some real and serious injustice in refusing to order a witness trial, we might contemplate doing so even now. But, on an overall view of the case, we are satisfied that it is by no means in that class. Like both Courts below, for our part we prefer to determine it now on the affidavits filed in the High Court. In our view this is in accordance with the interests of justice.

On the affidavits we accept Mr Seru’s evidence that the plaintiff told him during the meetings on 28 August and 17 September that he would not enforce any settlement against the Government; that he (the plaintiff) knew the Government did not have the money anyway; that it would assist the National Bank of Fiji to assist the plaintiff if the draft deed of settlement were signed by Mr Seru; that the draft deed was simply to assist him in obtaining his finance deal; and that he (the plaintiff) realised that the Cabinet would not agree to the proposed settlement. We also accept that Mr Seru did not consider that he had entered into a contract with the plaintiff to settle the actions, and thought that as a result of the plaintiff’s assurances he (Mr Seru) was protecting the Government from having the deed enforced against it.

In accepting Mr Seru’s evidence to the foregoing effect we have in mind the significant feature already mentioned that neither the plaintiff nor Mr Gavidi expressly contradict it. Further, and of comparable significance, there are no affidavits from the plaintiff’s other two companions (according to Mr Seru) on both occasions, Mr Tuisawau and Mr Butadroka. It was the former who witnessed Mr Seru’s signature to the deed.

Mr Seru’s evidence is detailed, candid and from one obvious point of view very much against his personal interest. His actions were foolish, misguided and naive; but it must be remembered that the era after the coups was not one of great political maturity in Fiji.

When it was put from the bench during the argument of the appeal in this Court that it was unprecedented for an Attorney-General to sign a deed not intended to be genuine, counsel for the appellant was constrained to acknowledge that these were peculiar times.

We think, too, that it would be almost incredible that Mr Seru would sign a document really intended to commit the Government legally to expenditure of nearly a million dollars (at the least) without legal advice on whether there was substance in the plaintiff’s claims in the two actions and, if so, the range of damages that might be appropriate. There is no suggestion that the Solicitor-General or any other lawyer acting in a professional capacity advised Mr Seru. Whatever Ratu Etuate Tavai’s precise role in the matter, it was not that of legal adviser, nor is there any suggestion that he was present at the meetings on 28 August and 17 September. It is true that Mr Seru himself also had legal qualifications and experience, but one would not expect his experience to have extended to litigation of this magnitude. And any suggestion that the document was meant to be binding as regards the $980,000 only and not the remainder about the lands and debts is almost equally implausible. In fact the provisions about the lands and debts occupy much the greater part of the Attorney-General’s purported obligations under it.

In the result we accept that when he signed the document Mr Seru did not intend to enter into contractual relations on behalf of the Government, and that the plaintiff knew this. A common intention to enter into legal relations is essential for the validity of a contract. It is of course quite rare for a document drawn up and executed by the parties in legal form to fail because of the proved absence of contractual intention but such a situation is not unknown.

Such a document is unenforceable. It is a sham. As it so happens there has been another recent instance of the operation of this principle: Glatzer and Warrick Shipping Ltd v Bradston Ltd (The Ocean Enterprise) [1997] 1 Lloyd’s Rep. 449, 485.

The approach that we have taken was suggested in the Courts below in no more than an oblique way at best. In the written submissions for the defendant in the High Court it was rendered as a collateral oral contract whereby the plaintiff agreed not to enforce the deed of settlement. In this Court, when the matter was expressly raised with him from the bench, counsel for the respondent made it clear that he did maintain that the appellant’s case should fail because of the evidence of Mr Seru that we have reviewed and accepted. In any event, it is well settled that a court should take notice of an illegality that appears on the face of evidence before it. We think that this case of a sham is at least closely analogous and that the same principle must apply.

This conclusion makes it unnecessary for us to express an opinion on the grounds of the judgments in the High Court and the Court of Appeal. We make only two observations on them. First, we would be disposed to uphold what both Courts said about impossibility of performance, and what the Court of Appeal said about inseverability. Secondly, notwithstanding the reservations of the Court of Appeal, we see force in Scott J.’s view of public policy. A settlement of the plaintiff’s civil actions for such a large sum and other unquantified but also very large benefits, without proper legal advice, would have been in the circumstances such an irresponsible acceptance of public liability that, without Parliamentary approval, it might have been beyond the actual or ostensible authority of the Fiji Government. But we need take this point no further.

Finally it should be mentioned that the plaintiff has disclosed that he faces a charge in the Magistrate’s Court at Suva of attempting to obtain credit by fraud, and that there is also a charge of aiding and abetting against Mr Seru. These charges relate to the alleged presentation to the National Bank of Fiji of the deed of settlement as a good and valid security. We would not expect the decision of this Court in the present civil proceedings to be admissible in criminal proceedings. In any event the Court trying a criminal charge may hear different evidence from that on which this case has fallen to be determined, and will have to reach a decision on the evidence that it receives, uninfluenced by the result of the present case.

For these reasons we hold that this appeal should be dismissed with costs.

Sir Timoci Tuivaga

Lord Cooke of Thorndon

Solicitors:

G.P. Lala & Associates, Suva and Vuataki Prasad & Associates, Lautoka for the Appellant
Attorney-General’s Chambers, Suva for the Respondent

CBV0002U.96S