Vaitu'ulala v 'Iongi [2011] TOCA 6; AC 17 of 2010 (30 September 2011)

IN THE COURT OF APPEAL OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA REGISTRY

APPEAL NO. AC 17 of 2010
[CV 199 of 2009]

BETWEEN :

ALIFELETI VAITU'ULALA
Appellant

AND:

SITIVENI 'IONGI
Respondent

Coram : Burchett J
Salmon J
Moore J

Counsel : Mr Niu for the Appellant
Mr W. Edwards for Respondent

Date of Hearing : 22 September 2011
Date of Judgment: 30 September 2011

JUDGMENT OF THE COURT

[1] This is an application to set aside a consent judgment of the Court of Appeal. The application is by the appellant, 'Alifeleti Vaitu'ulala, and is made on the basis that counsel who had been appearing for him in the appeal when the consent judgment was made, had no authority to agree to the settlement embodied in the consent judgment.

[2] The relevant facts can be briefly stated. With one qualification, it is unnecessary to set out the underlying facts which gave rise to the litigation in the Supreme Court or the details of the claims which had been made and were the subject of the judgment of the Supreme Court. The appellant and the respondent, Sitiveni 'Iongi, had business dealings concerning the operation of a quarry. This gave rise to a commercial dispute between them which led to litigation. The appellant was the plaintiff in the Supreme Court. His claim was dismissed. The respondent was the defendant and also counterclaimed. His counterclaim was successful and he obtained judgment against the appellant in the sum of $162,000 plus interest and costs. Judgment in that sum was given on 17 August 2010.

[3] The appellant appealed against that judgment. The appeal was listed for hearing in the April 2011 sittings of the Court of Appeal. At the hearing of the appeal, the Court of Appeal raised questions with counsel for the respondent as to whether the judgment below was correct. This led to an overnight adjournment of the appeal to enable settlement discussions to take place. When the appeal next came before the Court of Appeal the following day, we were informed by counsel for both sides that the case had been settled and we were asked to make orders by consent disposing of the appeal. We did so which included setting aside the judgment of the Supreme Court awarding the respondent $162,000 as damages and substituting an award of damages of $62,000.

[4] The appellant now says his counsel had no authority to agree to an order requiring him to pay damages of $62,000. His application to set aside the consent judgment is supported by an affidavit he swore on 26 August 2011. The affidavit traverses a number of matters of detail concerning the operation of the quarry pointing, on the appellant's version of the facts, to a result which would entitle him to be paid money by the respondent and seeking to demonstrate that he had no liability to pay the respondent $62,000. One factual issue raised in the affidavit concerns a stockpile of gravel extracted by the appellant which, so the appellant contends, was apparently sold by the respondent who retained the proceeds. We mention this only because the stockpile, its sale and the disbursement of the proceeds was not an issue raised by the appellant in his statement of claim nor in his defence to the respondent's counterclaim at the trial in the Supreme Court.

[5] In his affidavit, the appellant says the following about the instructions he had given counsel appearing for him in the appeal:

30. I therefore [after the judgment against him for $162,000] instructed my then counsel Mr Vuna Fa'otusia, to appeal the decision of the Court and to inform me when the appeal would be held so that I would be sure to be present at the hearing. He told me that the Court of Appeal session was around July 2011. My wife and I then prepared and we left Tonga in November 2010 intending to return in May 2011.

31. The appeal was however held in April 2011 and my counsel had not informed me of it at all, but what was worst of all was that he made a settlement without my knowledge or consent with counsel for the respondent which resulted in the Court of Appeal making the consent orders on 13 April 2011 as follows:

[The orders of the Court of Appeal are set out]

32. Not only did counsel fail to inform me of the appeal or of the negotiation for settlement, he failed to inform me of the consent orders either. ..........

[6] This application raises three issues. The first is whether the Court of Appeal has power to set aside orders regularly made and made by consent. The second is whether, in exercising any such power, the Court should, as a matter of discretion, set aside the orders in this matter. The third (which is caught up with the second) is whether counsel for the appellant lacked authority to agree to the settlement and consent to the orders.

[7] We are prepared to assume that in a case such as the present in which it is alleged counsel had no authority to agree to a settlement and the consent order, we have power to set aside orders regularly made. It may be necessary, in another case, to examine this question in detail if the Court of Appeal is repeatedly asked, in the future, to set aside orders regularly made for the same or similar reasons. We acknowledge that in other and quite different circumstances we have power to set aside our orders and this matter was discussed in Tu'ivai v R (2007) Tonga LR 31.

[8] The general rule, as a matter of law, is that if counsel is briefed to appear for a party in litigation, then counsel has an implied authority to conduct the litigation as counsel thinks fit (though plainly he or she must do so having regard to the interests of the client) and has authority to settle or compromise litigation without express instructions to do so: see generally Halsbury's Laws of England, 4th ed, Vol 3(1), Barristers, para 517 and following. That is not to suggest it is not a regular and desirable practice for counsel to get express instructions to settle on particular terms before doing so. It has been, in our experience and knowledge of practices of the bars of common law countries, usually the case that counsel does get those express instructions. But these practices do not derogate from the legal rule that counsel has general authority to conduct and settle litigation notwithstanding the absence of particular instructions to settle on specific terms.

[9] There is, however, a qualification to this legal rule, namely counsel has no authority to settle on specific terms if counsel has express instructions which would preclude the settlement on those terms, such as express instructions not to settle at all or express instructions not to settle on specified terms which are different from those that are proposed (for example express instructions not to settle for less than a specified sum). There is precedent which suggests counsel's apparent authority to compromise cannot be limited by instructions, not even the withdrawal of instructions, unknown to the other party: Taylor v Cogswell (1965) 109 S.J. 495. But it is unnecessary for us to consider whether this is correct because, on the appellant's own affidavit, it is not apparent that counsel appearing for him in the appeal before us had express instructions which prevented him from agreeing to the terms on which the appeal was settled and the consent orders which were made.

[10] Accordingly, the appellant's counsel had authority to settle on the terms reflected in our orders of 13 April 2011 and there is no basis for setting aside those orders. The application to set them aside should be dismissed with costs.

[11] We should conclude with an observation. The appellant may feel genuinely aggrieved by this result. But these legal rules concerning the implied authority of counsel serve a wider public purpose. Unless such rules exist and are applied, there is a real risk that the administration of justice will become bogged down by claims of disaffected or disgruntled litigants complaining that settlements agreed to by their counsel were not authorised. Experience tells us that it is not uncommon for litigants to reflect on settlements earlier reached and persuade themselves days, weeks or months later that they could have done better. If there are not rules which limit the circumstances in which settlements can be undone, there is a very real risk that the whole process of litigation will become unmanageable by the courts. That is not in the public interest.

Burchett J
Salmon J
Moore J