Sevele v Saulala [2005] TOLawRp 12; [2005] Tonga LR 250 (28 April 2005)

IN THE SUPREME COURT OF TONGA

Sevele

v

Saulala

Supreme Court, Nuku'alofa
Ford J
CV 105/2002

11-13 April 2005; 28 April 2005

Practice and procedure – verbal settlement of action claimed – not proved

The plaintiff claimed that on or about the 21st day of November 2003 the defamation action was settled out of Court by a verbal agreement between the parties' respective solicitors. The defendant denied that any such agreement was ever reached.

Held:

1. The onus of proof was on the plaintiff to establish his case on the balance of probabilities. The plaintiff failed to persuade the Court that the parties settled the proceeding by an agreement entered into verbally between their respective solicitors on or about the 21st of November 2003, as alleged in the plaintiff's second amended statement of claim.

2. The Court observed that the parties had already encountered problems in October 2003 which resulted in the defendant's application to the Court for an order enforcing a settlement agreement which the plaintiff denied had ever been reached. Against that background, it behoved counsel to take extra precautions the second time around to ensure that all the terms of any settlement were well and truly recorded in writing with the t's crossed and i's dotted before any formal announcement was made that the proceeding had been settled.

3. The plaintiff's action on the settlement failed. His defamation cause of action remained extant. The defendant was entitled to costs to be agreed or taxed.

Case considered:

Allison v KPMG Peat Marwick (1994) 8 PRNZ 128

Counsel for plaintiff: Mr Waalkens QC
Counsel for defendant: Mr Edwards and Mr Kaufusi

Judgment

The Issue

The plaintiff claims that on or about the 21st day of November 2003 this proceeding, which commenced as a defamation action, was settled out of Court by a verbal agreement between the parties' respective solicitors. The defendant denies that any such agreement was ever reached. Whether or not there was such a settlement is the issue before the Court.

The Background

The plaintiff is a prominent businessman in Tonga and at all material times he was the number 2 Peoples' Representative from Tongatapu in the Legislative Assembly. Following the most recent general election in March 2005, the plaintiff was appointed Minister of Labour & Commerce in the newly announced Cabinet. As at the date of delivery of this judgment, he is the acting Prime Minister of Tonga.

The defendant is the owner and, up until recently, was the editor of a weekly newspaper called the "Tonga Star". He is also the manager of the OBN television station.

On the 4th of February 2002 the Tonga Star published a letter to the editor, which the plaintiff alleges was seriously defamatory of him. It is claimed that the statements made in the letter meant that "the plaintiff had committed a felony." The plaintiff instructed a local lawyer, Mr Laki Niu, and the present proceedings were issued on 13 February 2002. The defendant instructed Mr William Edwards as his lawyer and a statement of defence was duly filed denying virtually all of the allegations made in the plaintiff's statement of claim apart from publication.

The case was initially set down for trial before a Judge alone on 25 September 2002 but various interlocutory matters then arose which meant that the September fixture and a subsequent fixture made for July 2003 had to be vacated. The hearing was eventually fixed before a judge and jury for five days commencing 17 November 2003.

"Without Prejudice" Correspondence and Negotiations

At the commencement of this hearing, which was confined to the alleged settlement cause of action, I heard legal argument as to whether the Court was entitled to have regard to correspondence passing between solicitors which was clearly marked "without prejudice" and settlement negotiations that were conducted on a similar basis. I gave a ruling that such evidence was admissible and in my ruling I made reference to the following passage from Cross on Evidence, 7th Australian edition (2004), [25380]:

"Once negotiations have been completed as a result of without-prejudice interviews or letters, a binding contract has been brought into existence and this may, of course, be proved like any other contract. But this does not make the communications which led to the compromise discoverable to other parties nor does it remove the privilege attending to these communications. However, the Court may examine the communications in order to see whether a contract has been arrived at."

Subsequent research has revealed a relevant New Zealand authority in this area of the law and I respectfully adopt the following statement of principle from the judgment of Anderson J in Allison v KPMG Peat Marwick (1994) 8 PRNZ 128, 131:

"The without prejudice rule applies to exclude all negotiations genuinely aimed at settlement whether oral or in writing from being given in evidence. The rule is not absolute and resort may be had to the without prejudice material for a variety of reasons when the justice of the case requires it. One of the exceptions, which is very relevant to the present case, is that without prejudice material will be admissible if the issue is whether or not the negotiations resulted in an agreed settlement."

The First Alleged Settlement

Senior counsel for the defendant, Mr Clive Edwards, is the father of the defendant's original solicitor, William Edwards, and so, to avoid confusion, I will refer to William by his first name and for the sake of consistency, for the most part, I will refer to Mr Niu by his first name, "Laki".

It appears that settlement discussions were first broached in September 2003. On 10 October 2003 Laki wrote a without prejudice letter to William which commenced as follows:

"You will recall that we spoke about settlement of this matter and to leave it to our respective clients to work it out and let us finalise it.

I have spoken to my client about it and he has instructed me to attend to it on his behalf and let him know the outcome for his approval. . . ."

The letter proposed a settlement made up of damages $125,000, costs $12,500, plus an apology.

On 13 October William responded pointing out that "the demands" sought could not be acceded to for several reasons including the fact that the plaintiff had allegedly already personally offered to settle his claim with the defendant in the presence of witnesses without damages for disclosure of the real name of the letter writer, named in the newspaper as "Ate Fulufulu" --(a non de-plume) and payment of his lawyer's costs in the form of free programming time on OBN television to that same value. William indicated that in respect of the apology, "we are open to continued dialogue".

At a Directions Hearing held in Chambers on 5 November 2003, William indicated to the Court that the parties had already settled and that he was proposing to file an application to enforce the settlement. He did so later that same day. The defendant swore a supporting affidavit in which he deposed that the case had settled. Mr Saulala said in part of his affidavit:

"4. In order to embark upon settlement negotiations, I instructed my lawyer to approach Mr Laki Niu, counsel for the plaintiff, outside the Supreme Court and request whether it would be in order for me to speak to his client and to discuss settlement. I was granted permission by Mr Niu to discuss settlement with the plaintiff.

5. I had made inquiries as to the whereabouts of the plaintiff, I initiated settlement negotiations with him when he came down to OBN television to participate in a programme to be broadcast on 23 September 2003.

6. During our conversation we discussed terms and he indicated that he would take care of his own lawyer's costs if I would give him time on OBN television to the amount of his lawyer's costs. I agreed on that and also agreed to publish an apology as well as disclose the name of the author of the article which is the subject of these proceedings. He did not indicate in what amount the lawyer's costs were at that stage. I agreed to give free air time and we both agreed that the lawyers would formulate the terms to be filed in court. I regarded the matter as settled and nothing the plaintiff had said to me indicated that he did not agree with what had been proposed."

In his affidavit, the defendant further alleged that pursuant to the agreement he had already made free airtime available to the plaintiff and his colleagues from the Tonga Human Rights and Democracy Movement and other Peoples' Representatives in the Legislative Assembly.

The plaintiff filed a notice of opposition to the defendant's application to enforce settlement. The stated grounds of opposition were:

"There was never any compromise or agreed settlement at all between the plaintiff and the defendant or as alleged by the defendant in his application dated 5/11/03."

The plaintiff filed a supporting affidavit where he strongly denied that he agreed to settle the case along the lines stated by Mr Saulala. He said that the discussion referred to lasted no longer than "one or two minutes" and that "I clearly stated to Mr Saulala that I definitely wanted the settlement to be negotiated by our two respective lawyers."

The Second Alleged Settlement

As it turns out, the settlement negotiations I have just referred to are not the settlement negotiations upon which the present cause of action is based. The present cause of action is based on subsequent negotiations, which are alleged to have commenced from on or about the 7th of November 2003.

The Court file notes that on Friday 7 November 2003 both counsel appeared in Chambers for a Directions Hearing at 9 a.m. and a further Directions Hearing was then scheduled for Monday 10 November. There was a wide disparity in the evidence as to the events that unfolded as from Friday the 7th of November 2003.

The Plaintiff's Case

Laki told the Court that after the Chambers hearing on the Friday morning he and William talked in the car park outside the Court and later that same morning he received a settlement proposal in a telephone call from William. The offer was:

1. There would be an apology (in the terms of the apology that Laki had apparently earlier drafted);

2. There would be disclosure of the name of the letter writer;

3. The plaintiff's legal costs were accepted by the defendant at $12,500 but the defendant alleged that the plaintiff already owed $3750 for broadcasting time. The proposal, therefore, was that the balance of $8,750 would be paid by a $5,000 cash payment within 14 days and the balance of $3750 would be paid on 22 December 2003.

4. The plaintiff would be entitled to $20,000 worth of free programming time on OBN calculated at a rate of $250 for half an hour or $500 per hour.

Laki said that he made a file note recording that offer and later that same day, after contacting his client, he telephoned William and conveyed a counter offer in the sum of $32,500 made up of damages $20,000 and costs $12,500 along with the draft apology. The $32,500 was to be paid in instalments with $5,000 payable immediately "upon signing"; $5,000 on 14/11/03; $7,500 on 21/11/03 and the final instalment of $15,000 would be payable on 7 February 2004.

Laki's evidence was that William came back to him, still on Friday 7 November, with a further proposal, which again was not acceptable to Mr Sevele. Mr Sevele did, however, agree to extend the instalment dates under his earlier proposal to 30/11/03, 20/12/03, 31/1/04 and 31/3/04 respectively (the year for the last two dates is wrongly shown in Laki's file note as 2003). Mr Sevele also wanted a provision included allowing for judgment in default in the event of any default in the instalment payments.

Laki made file notes of the conversations, or some of the conversations, he had with William and Mr Sevele. The file notes were recorded on two foolscap pages torn from a pad, which Laki told the Court he kept by his telephone. The record of the first conversation with William takes up the complete first page and it is clearly dated 7/11/03 but the notes of the subsequent telephone conversations recorded on the second page are all undated. Laki was adamant that they had also taken place on Friday 7 November but Mr Edwards submitted it was more probable that they were recorded on Monday 10 November.

Mr Waalkens in response referred to some words written towards the top of the second page of notes, which have been crossed out, but they appear to have read, "upon signing Monday" and he submitted that they could only have been written on the Friday. Mr Niu, when asked, could not recall why he had crossed the words out.

I find the evidence on the matter equivocal. I accept that the words crossed out were most likely written on the Friday but it by no means follows that everything that then appears after the crossed out words were also written on the Friday. As it turns out, it is not necessary for me to make a firm finding on this particular issue. I do make the observation, however, that whenever the final note on the second page was made, which records the last conversation Laki had with his client in which Mr Sevele agreed to extend the instalment dates, there is no corresponding handwritten note confirming that that amended proposal was then conveyed by Laki to William.

The next development occurred shortly before 9 am on Monday 10 November 2005. Laki said that he was waiting outside the Court to attend the Chambers Directions Hearing when William arrived in a hurry to go elsewhere and said to him, "Sangster has agreed to the terms proposed. You can convey that to the Judge." Laki said that he then attended in Chambers on his own and he conveyed to the Judge that "we had settled". The Court then made an Order noting that Mr Niu had confirmed that the parties had settled and he expected to be able to file a memorandum of settlement in the near future. The fixture for 17 November 2003 was vacated.

Laki said in evidence that following the Chambers Hearing he returned to his office and drew up a document confirming the terms of settlement ("the draft agreement"), which he had faxed to William's office on the same day, for signing by Mr Saulala and William, along with a Notice of Discontinuance and a draft apology. There was no covering letter sent with the documents.

The draft agreement was headed "SETTLEMENT OF ACTION" and consisted of four paragraphs. The first paragraph referred to the apology; the second set out the instalment dates for payment of the $32,500; the third related to the filing of a Notice of Discontinuance and the fourth provided for the entry of judgment in default together with interest if the instalments were not paid by the due date. Laki accepted that the contents of clauses 3 and 4 had not, at any stage, been discussed with William.

Laki told the court how he later received a message from his secretary that William had requested a hard copy of the settlement memorandum and an original had been delivered to his office. On 14 November 2003 Laki faxed a handwritten letter to William, which read:

"William,

Re: Sevele v Saulala

Please let me have your comments re draft settlement which I faxed you on Monday 10/11/03. If it is in order please let me know so that I can have my client sign & I'll forward it for your client's signature. We need to confirm the adjournment of the case in writing to the Court, as I had told the Judge.

Thanks, Laki."

Continuing in evidence, Laki said that he still did not hear from William but he met up with him again on Friday 21 November outside the Chief Justice's Chambers and he asked him what had happened regarding the settlement. He said that William asked him if he could send him the original because he needed it for his client's signature. Laki pointed out that he had already sent him an original but he returned to his office and instructed his secretary to deliver another one.

On 1 December Laki and William met again outside the Chief Justice's Chambers and Laki told the Court that on that occasion he asked William what was happening because he had heard nothing further and the first instalment was then overdue. He said that William explained how he was having problems contacting his client and he commented that Mr Saulala was trying to get his father to pay. William suggested that Laki should try to speak to Mr Saulala directly and he gave him a New Zealand contact number to call. Laki said that he tried to make contact but was unsuccessful.

On 2 December Laki wrote a letter to William, paragraph 4 of which received some attention during the hearing. I set out paragraphs 3 and 4 in full:

"3. I had faxed you the agreement of settlement on 10/11/03 for confirmation so that we could have it signed by our clients and ourselves.

4. You subsequently informed me after about a week and a half that the draft was OK and to let you have the original to have your client sign and return to me. You were given those on 21/11/03. (My clerk gave them to your clerk and your clerk came into your office and gave them to you and then informed my clerk that she had given them to you). To date you still have not returned them to me."

Laki did not hear anything in response to his letter and so on 12 December 2003 he filed an application for final judgment. The principal ground for his application was that the parties had made an agreement for settlement of the action on 10/11/03.

Subsequent Developments Regarding Court Fixture

The Court fixed a Directions Hearing for 13 February 2004 and on that day William sought leave to withdraw as Mr Saulala's counsel upon the grounds that he had been unable to obtain instructions from his client. Leave was granted upon condition that a further Directions Hearing would be held on 25 February 2004 and if the defendant wished to oppose the plaintiff's application for judgment then he would need to file a notice of opposition by 20 February 2004.

The defendant then proceeded to instruct Mr Kaufusi as counsel and Mr Kaufusi duly filed a notice of opposition to the plaintiff's application for judgment. At that stage, of course, there were two applications for judgment before the Court:

(1) The original application filed by the defendant dated 5 November 2003 based on an alleged compromise and settlement of the defamation action and;

(2) The second application filed on behalf of the plaintiff on 12 December 2003 alleging a different compromise and settlement.

Both applications for judgment were awaiting a hearing date.

At the Directions Hearing on 25 February 2004 both Mr Niu and Mr Kaufusi appeared in Chambers but neither counsel sought a hearing date in connection with their respective applications for judgment. Instead, Mr Niu sought and was granted a fixture for the substantive defamation claim before a Judge and jury during the week commencing on 11 April 2005. The defendant, in turn, was granted leave to file an amended statement of defence.

Following on from there, various interlocutory matters were dealt with by the Court from time to time. At one point, the date for the jury trial was brought forward to August 2004, but then, by consent, the original fixture was reinstated.

Shortly before the pre-trial conference, which had been scheduled for 15 March 2005, Mr Waalkens advised the Court that he had been instructed as counsel for the plaintiff and he sought leave to file an amended statement of claim, which contained two causes of action. First, a cause of action based on the alleged settlement and, secondly, the defamation cause of action. The settlement claimed by the plaintiff was still alleged to have been made on or about 10 November 2003.

The Court refused to allow both causes of action to be tried together in the belief that the issues would simply be too confusing for the jury. It ordered that the hearing would be confined to the plaintiff's alleged settlement cause of action.

The hearing was scheduled to commence on Monday 11 April 2005. On Friday 8 April two significant things happened. First, without leave, the plaintiff filed a second amended statement of claim alleging, for the first time, that the settlement agreement had been entered into verbally between the two solicitors "on or about the 21st of November 2003" (as distinct from 10 November which was the date relied upon up until then). Secondly, Mr Clive Edwards was instructed to handle the case as senior counsel for the defendant.

On Monday 11 April the jury was duly sworn in and, after hearing legal argument, the late amendment to the statement of claim was allowed. The Court, however, then ordered, by consent, that the case would proceed before a Judge alone and at that point the jury was discharged.

Case for the Defendant

The case for the defendant essentially is that, whether the relevant date is taken to be 10 November or 21 November 2003, there never was any settlement agreement reached between the parties. Mr Edwards submitted that the plaintiff's last-minute change to the pleadings showing a different settlement date was symptomatic of the difficulty he faced in being able to establish that the parties were ever ad idem as to the terms of any settlement.

The first witness for the defence was the defendant himself. By reference to his passport, Mr Saulala was able to tell the Court that he was out of the country between 28 October --3 November; 21 November --29 November; and 6 December --23 December, 2003. In relation to the initial settlement negotiations back in September/October 2003, which he claimed had resulted in a binding agreement, Mr Saulala told the court that he had given instructions to William to try and settle the case principally by offering the plaintiff free television time and disclosure of the name of the letter writer but he had never agreed to the terms of the draft agreement subsequently prepared by Laki. Mr Saulala indicated that, in fact, he had never even sighted the draft agreement.

Mr Saulala acknowledged that William had given him a copy of Laki's letter of 2 December and he said that he had personally responded by letter dated 5 December 2003. Mr Niu had earlier told the Court that he had never received Mr Saulala's letter of 5 December. I accept that statement because the copy of the letter before the Court does not show any PO Box address for Mr Niu and there is no evidence before the Court that the letter was delivered. I also accept, however, that the letter (which is in English) was written at the time by Mr Saulala and, as it effectively summarises his evidence to the Court on the subject, I will set it out in full:

"Mr Laki Niu

Law Practitioner

Nuku'alofa

Mr Niu

Re: Feleti Sevele v Sangster Saulala

I have received a copy of your letter dated at the 2nd December, 2003 addressed to my lawyer. I am surprised you are trying to bulldolzer (sic) a settlement that have not concluded and without my approval.

How can you apply an judgment against me for a settlement that is been negotiate. In paragraph 4 of your letter you try to deliver to my lawyer a form of settlement that I have not seen or signed.

I have not confirm with my lawyer or with you any terms of settlement. My lawyer has been talking to me and that's the end of it.

Mr Sevele and I have agreed to settle this matter if I screen free program for him which I did and he has subsequently denied its a settlement. How can you claim in your letter enter judgment against me according to clause 4 to an agreement which I have not seen or signed. You can't prepare a document and forward to my lawyer and upon that you agree to it and upon which you can enter judgment. It sounds very funny to me if that is the law. I would like to have this case heard in court and full hearing before a jury.

Yours faithfully

Sangster Saulala."

The second witness for the defence was Mr Saulala's former lawyer, William Edwards. He, like Mr Niu, was subjected to a lengthy and searching cross-examination. One of the surprising features of William's evidence was that he had made no file notes whatsoever recording any of the events of November 2003 relating to this case. His evidence, therefore, was necessarily based upon his recollection of events.

There was a sharp conflict between William and Laki's evidence. William told the Court that he had no telephone conversations with Laki on Friday 7 November but they had a discussion about settlement outside the Chief Justice's Chambers that morning. He said that he had put forward Sangster's idea of free television programming and Laki wanted an apology, disclosure of the name of the author of the letter plus payment of his legal costs in full. William said that he did not offer an apology or costs but it was left on the basis that Laki would go back and speak to his client about the matter. According to William, they had no other discussions that day.

The next development, William could recall, occurred on the Monday morning outside Court shortly before 9 a.m. when Laki told him that Mr Sevele was not interested in free television programming and he wanted cash. He said that Laki then gave him the figures that Mr Sevele wanted. He saw Laki making some notes at this time and so he asked him to put the proposal in writing. William said that the discussion ended on the basis that both counsel would go back to their respective clients and Laki told him that he would go and see the Judge and arrange for the case to be adjourned.

William denied having told Laki on that occasion that the figures were acceptable. He said that that was the first time he had learned of Mr Sevele's proposal and he had not had time to consider it or discuss it with his client.

William confirmed receiving the draft agreement by fax from Laki later that same morning and he also confirmed telephoning Laki's office the following day and asking him to send over the originals so he could speak to his client about them. He said that he received the originals on the Wednesday but essentially his evidence was that Mr Saulala was very busy about this time and virtually impossible to make contact with and so he did not have an opportunity to speak to him about the draft agreement.

In reference to 21 November 2003, which is the plaintiff's amended date of settlement, William denied having any conversation or communication with Laki on that day and he denied asking for or receiving any further original of the draft agreement.

There was other evidence, some of which went to credibility, which I have taken into account but essentially the foregoing summarises the case presented for both sides.

The Evidence

Against that rather convoluted background, the Court has been left to try and put the pieces of the jigsaw in place.

One of the problems the plaintiff faces is in reconciling or explaining the last-minute change of pleading which saw the alleged settlement date altered from 10 November 2003 to 21 November 2003. Mr Waalkens stressed that the words in the amended pleading read, "on or about the 21st November 2003". Be that as it may, up until the very eve of the hearing the alleged settlement date had been 10 November 2003. Mr Sevele had sworn and filed an affidavit dated 10 December 2003 in support of his application for judgment deposing that the settlement agreement had been made on 10/11/03. What happened, Mr Edwards asked rhetorically, that led to the last-minute change in the alleged settlement date.

In his closing submissions, Mr Edwards hypothesised that the real reason for the late change of date was that Mr Waalkens, after having had the opportunity of examining all the relevant documentation, had realised that the allegation that counsel had reached a binding agreement on Monday 10 November 2003 simply did not "stack up". Senior Counsel for the defendant placed particular emphasis in this regard on Mr Niu's handwritten letter to William dated 14 November which began with the words: "Please let me have your comments re draft settlement . . . ." "He was asking for comment," Mr Edwards submitted, "he was not saying this is the settlement agreed upon or the settlement you accepted." Mr Edwards also stressed that there was not one file note produced by Mr Niu recording that the draft settlement had been accepted or agreed to.

In his closing submissions, Mr Waalkens accepted that there was no concluded settlement reached on 10 November. Whilst stressing that the events of 7, 10 and 11 November were very important for setting the background, plaintiff's counsel invited the Court to focus on the events of 21 November or thereabouts as evidence of the existence of a binding settlement agreement. I now turn, therefore, to the evidence touching upon the period "on or about 21st November 2003."

As I have noted already, for his part, William told the Court that nothing at all happened on Friday 21 November. His evidence was that he had no communication or conversation with Laki whatsoever on that date in relation to this case and I took his answers to be broad enough to encompass the term "on or about 21st November."

Laki's evidence in relation to 21 November was surprisingly brief. In examination in chief, he did not even mention the 21st of November specifically nor, in spite of some prompting through leading questions, did he make mention of any conversation he had with William that could conceivably have amounted to an acceptance of any settlement proposal. After being referred to his handwritten letter to William of Friday 14 November, Laki was asked by Mr Waalkens what happened next?

"A. It was about a week or over a week. I had not heard from Mr Edwards until he and I met outside the Chambers of Chief Justice Ward at the time. That is the verandah outside his office and I asked him what happened to the settlement that he was to sign or his client was to sign and he said if I could send him the original documents and I said I had sent them and he said he needed the original again.

Q. And did you arrange for that to be given to him?

A. Yes, I returned to the office afterwards and I instructed my secretary to forward those documents.

Q. And what did Mr Edwards say about the terms of the settlement as they are recorded in this document "Settlement of Action"?

A. Nothing. He just said that he needed them for his signature --for signing by him and his client.

Q. Did he say whether the terms were acceptable?

A. He said that they --he didn't say that they were not acceptable. He just wanted them for signing.

Q. Did he say anything about there being no agreement until Mr Saulala had signed?

A. No

Q. You mentioned it was outside Justice Ward's Chambers; was that in relation to this case or something else?

A. No, that's on a different matter." The matter was then followed up by Mr Edwards in cross-examination:

"Q. Now Mr Niu, you said that you spoke to William on the 21st of November 2003?

A. That is correct.

Q. Did you record that conversation?

A. No, I did not.

Q. You didn't?

A. No.

Q. You regarded that as a very important conversation?

A. I went to the office and I instructed my secretary, Pasepa Tu'i, to take the documents across to Mr Edwards.

Q. That's not what I asked you. I asked you did you write that down?

A. No, I did not.

Q. Why not? Seeing it is an important issue for your client, why didn't you write it down?

A. This was outside Chambers. We were talking and, I can't remember, we were going to different Chambers hearings.

Q. Mr Niu, here is a crucial date as you say it was settled and nothing was recorded --nothing in writing and you are now saying it was settled on that date?

A. I had already provided to Mr Edwards a fax of the settlement and I followed it up later and then on the 21st of February (sic), having heard nothing from him, I raised it with him and he asked me to give him the documents --the originals.

Q. Mr Niu, did you write a letter saying I now enclose the final documents as per our agreement to settle and please get your client to sign it? Did you write a letter like that?

A. No I did not."

Later in cross-examination, Mr Niu was referred to his letter of 2 December 2003 and he appeared visibly taken aback when he was informed by counsel that the alleged settlement date had been changed in the pleadings from 10 to 21 November 2003:

"Q. You say in the first paragraph (the letter of 2/12/03) that the matter was settled on the 10th of November?

A. That is correct.

Q. And you now ask the Court to amend the date of settlement from the 10th to the 21st? Mr Waalkens: He didn't request that. That's my request Your Honour to be fair. Mr Niu: I wasn't aware of that.

Q. Through your counsel an application has been made to amend the date of settlement to the 21st, correct? Mr Waalkens: I am not his counsel. I am counsel for the party, not for this witness.

Court: Yes, that's correct. You better ask Mr Niu if he is aware of that because he's just a witness."

. . . . .

Mr Edwards continued his questioning:

"Q. Counsel, senior Counsel in this case, whose conducting this case delivered to Mr Kaufusi on behalf of Mr Waalkens the amendment, to amend it to the 21st and filed it in Court?

A. I must have forgotten about that.

Q. You mean that counsel in this case filed this amendment without consulting you?

A. He did.

Q. Oh, I see.

A. I signed it for him and filed it in Court but I may have overlooked that matter."

It was not until the very end of his answers in cross-examination in relation to this aspect of the evidence that Mr Niu made mention of a comment by William which the plaintiff's case appears to hinge upon:

"Q. So Mr Niu, which is the correct date of settlement in view of the amendment that has been filed?

A. Well, we made the settlement on Monday the 10th of November. We then approved the draft of the settlement on the 21st. He conveyed to me on the 21st. Prior to the 21st Mr Edwards made no direction or comment or denial of settlement whatsoever at any time prior to the 21st. On the 21st he then informed me, "Oh, the draft is okay, send the original to me.""

Conclusions

As I have observed, the words that I have highlighted which were mentioned almost in passing by Mr Niu towards the end of his cross-examination, appear to form the basis of the plaintiff's claim that the proceeding was settled on the 21st of November 2003. Mr Waalkens, however, relies upon the statement made subsequently by Mr Niu in the fourth paragraph of his letter to William of the 2nd of December 2003 as corroborative evidence that William had informed him on the 21st of November that the draft was okay.

As it turns out, there is other evidence before the Court which casts very real doubt on Mr Niu's recollection of events in relation to the 21st of November date. Mr Niu told the Court that after he had been asked by William on the morning of the 21st of November for another original of the draft agreement, he returned to the office and instructed his secretary, Pasepa Tu'i, to take the documents over to William's office.

Pasepa Tu'i was called as a witness for the plaintiff. She told the Court that she recalled receiving a telephone call from William Edwards asking for the original of the agreement and she explained in some detail how, after consulting Mr Niu, she then took the original across to William's office and waited while the clerk took the document into his room and returned confirming that she had given it to William. Significantly, Pasepa had made a handwritten file note recording the date of the telephone call she received from William and she told the Court that she delivered the original to his office either that same day or the very next day. Pasepa's file note is clearly dated 11 November 2003.

It was suggested to the witness, through some leading questions from plaintiff's counsel, that she had made another delivery of the original agreement to William's office at a later date but Pasepa did not accept that proposition and, in any event, her file note speaks for itself. I am satisfied that there was only one delivery of the original agreement to William and that was made by Pasepa on the 11th or 12th of November and there was no subsequent delivery of a second original on or about the 21st.

Pasepa's evidence, in other words, confirmed William's evidence that he had only asked once for the original of the agreement and that was on the day after he had received the faxed copy on the 10th of November. Pasepa's evidence also supports William's recollection that nothing, in fact, happened on the 21st of November, which had any bearing on the present case.

As in any civil litigation, the onus of proof is on the plaintiff to establish his case on the balance of probabilities. For the reasons outlined, the plaintiff has failed to persuade me that the parties settled this proceeding by an agreement entered into verbally between their respective solicitors on or about the 21st of November 2003, as alleged in the plaintiff's second amended statement of claim.

As an aside, I make this observation. The parties had already encountered problems in October 2003 which had resulted in the defendant's application to the Court for an order enforcing a settlement agreement which the plaintiff denied had ever been reached. Against that background, I would have thought it behoved counsel to take extra precautions the second time around to ensure that all the terms of any settlement were well and truly recorded in writing with the t's crossed and i's dotted before any formal announcement was made that the proceeding had been settled.

Given my findings on the facts, it is unnecessary for me to have to consider the interesting legal issues I heard submissions on relating to whether the two lawyers had actual, ostensible or implied authority to enter into a binding settlement. As it transpires, that issue never became a relevant consideration.

The plaintiff's action on the settlement fails. His defamation cause of action remains extant. The defendant is entitled to costs to be agreed or taxed.