Dai Zhi Zhen, Zhang Gui Ying v Alexander John Gosse Downer Minister for Foreign Affairs and Trade of the Commonwealth of Australia
[2006] ACTSC 120
DAI ZHI ZHEN, ZHANG GUI YING v ALEXANDER JOHN GOSSE DOWNER MINISTER FOR FOREIGN AFFAIRS AND TRADE OF THE COMMONWEALTH OF AUSTRALIA [2006] ACTSC 120 (14 December 2006)
PRACTICE AND PROCEDURE – alleged agreement for compromise of action – implied and ostensible authority of solicitor.
Diplomatic Privilleges and Immunities Regulations 1989 (Cth), reg 5A
Australian Federal Police Act1979 (Cth), s 8
Minister for Foreign Affairs v Magno & Anor (1992) 37 FCR 298
In re Newen; Carruthers v Newen [1903] 1 Ch 812
Waugh & ors v H B Clifford & Sons Ltd & anor [1982] 1 Ch 374
Hickman v Berens [1985] 2 Ch 638
Neale v Gordon Lennox [1902] AC 465
Shepherd v Robinson [1919] 1 KB 474
Emily Joan Harvey v Coralie Ngarita Phillips & anor (1990) 95 CLR 235
Buseska v Sergio & Anor (1990) 102 FLR 157
Esanda Finance Corporation Ltd & ors v Rocco Domenic Alvaro & ors [1998] WASC 390
McVey v St Vincent’s Hospital (Melbourne) Ltd [2005] VSCA 233
Jacobson v McMillan v Ballina Shire Council [2006] NSWLEC 375
No. SC 331 of 2005
Judge: Crispin J
Supreme Court of the ACT
Date: 14 December 2006
IN THE SUPREME COURT OF THE )
) No. SC 331of 2005
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:DAI ZHI ZHEN
First Applicant
ZHANG GUI YING
Second Applicant
AND:ALEXANDER JOHN GOSSE DOWNER MINISTER FOR FOREIGN AFFAIRS AND TRADE OF THE COMMONWEALTH OF AUSTRALIA
Respondent
ORDER
Judge: Crispin J
Date: 14 December 2006
Place: Canberra
THE COURT ORDERS THAT:
The proceedings be dismissed.
The defendant pay to the plaintiffs the sum of $20,000 for costs of the proceedings within 28 days.
The defendant seeks various orders that would effectively terminate the proceedings against him on the grounds that there is a valid and subsisting agreement for their compromise and/or that the relief sought would not materially affect the rights or liabilities of the parties.
The proceedings relate to two certificates issued by the defendant in his capacity as Minister of State for Foreign Affairs pursuant to regulation 5A of the Diplomatic Privileges and Immunities Regulations 1989 (Cth) on 16 March 2002. The first certified that banners erected as part of the protest conducted by members of Falun Gong on what was said to be prescribed land opposite or near the Chinese Embassy “impairs or (if it were to take place or continue) would impair the dignity of the mission or of the residence of the head or another diplomatic agent of the mission and that its removal would be an appropriate step to prevent the impairment or the continuation of the impairment of the Chinese Embassy.” (sic) The second was in the same terms save that it referred to implements used to make amplified noise rather than banners. The certificates remained in force for only 30 days but were replaced by successive certificates to the same effect.
The plaintiffs claim a declaration to the effect that the two certificates were invalidly issued and an injunction restraining the defendant from issuing further certificates in effectively identical terms.
In July 2004 Mr Collaery wrote to the the defendant on behalf of some Falun Gong practitioners complaining that police had seized banners bearing words such as “Truth, Compassion and Forbearance”. He contended that the use of certificates to suppress the use of such signs went beyond the scope of the legtimate scope of the power provided by regulation 5A, as explained in Minister for Foreign Affairs v Magno & Anor (1992) 37 FCR 298, and suggested that people in democratic societies like Australia should be permitted to protest about abuses of human rights. He added that some of his clients had been tortured and the husband of one had been murdered. Hence they had a legitimate reason to protest. The defendant continued to issue certificates despite these quibbles and the present proceedings were commenced in June 2005.
It appears that the defendant subsequently received some sound legal advice. The practice of issuing the certificates was discontinued, with the last expiring on 11 March 2006, and negotiations were commenced with a view to negotiating a settlement of the pending proceedings.
By letter dated 13 March 2006 the Australian Government Solicitor (“AGS”) wrote to Mr Collaery, who was acting for the plaintiffs, stating that the defendant would not in future issue certificates in effectively identical terms to those that the plaintiff sought to impugn, and suggested that the plaintiffs discontinue the proceedings and that the parties pay their own costs. In a follow up letter dated 28 March 2006, the AGS mentioned that the matter had been listed for directions on 3 April 2006 and sought a response prior to that hearing.
Mr Collaery replied by letter dated 30 March, explaining that it had taken some time to obtain instructions as Ms Dai had been in Geneva. He said that his clients had intructed him that certain claims apparently made by the defendant concerning the Falun Gong protest had been untrue and they asked him not make further claims that were not supported by the Australian Ferderal Police (”AFP”). Mr Collaery then adverted to evidence that his firm had obtained in various places and indicated that the outstanding fees, including counsel’s fees, would be no less than $20,000 on a party-party basis. He went on to state that his clients had intructed him that they intended to continue their protest within the law and the protocol that they had already adopted.
The AGS responded on the following day, stating that the defendant was prepared to consent to an order that the proceedings be discontinued and that the sum of $20,000 would be paid for the plaintiff’s costs within 28 days of any such order.
There is no evidence of any direct response to that letter. However, at the directions hearing on 3 April 2006 Mr Collaery advised the court that the parties sought, by consent, an order that the plaintiffs be granted leave to file a notice of discontinuance within 14 days. The Registrar granted that leave and noted that the issue of costs had already been agreed between the parties.
10. Court records reveal that on 1 May 2006 the Registrar was told that a notice of discontinuance was still to be filed.
11. By letter dated 1 June 2006 Mr Collaery referred to the claim for an injunction restraining the defendant from issuing certificates in “effectively identical terms” to the initial certificates and sought a further assurance that the defendant would not issue certificates in terms “similar” to those previously issued. He advised the AGS that he might be unable to secure instructions to file a notice of discontinuance if such an assurance was not given. The last paragraph of that letter refers to “the arrangement reached with the Minister” which Mr Collaery said implicitly assumed that the defendant would not issue effectively identical certificates.
12. The AGS replied by letter dated 2 June 2006 stating, inter alia, that “as the matter was in effect resolved in March 2006, we would be grateful if you would obtain appropriate instructions and attend to the filing of a notice of discontinuance at your earliest opportunity”.
13. Court records for 5 June and 19 June 2006 indicate that on both occasions the Registrar was again informed that a notice of discontinuance was to be filed.
14. It was only on 17 July 2006 that Mr Collaery advised the AGS that he had been instructed to pursue the orders sought in the amended originating application.
15. It is in this context that the defendant claims that there was an agreement for the compromise of the proceedinsg and submits that orders should be made to give effect to it.
16. Mr Howe, who appeared for the defendant, gave the court an undertaking on his client’s behalf to the effect that the defendant would not issue further certificates in effectively identical terms and submitted that the plaintiffs should be required to fulfil their part of the agreement by filing a notice of discontinuance. He seeks orders that they do so within 14 days and, in the event of default, that the proceedings be dismissed.
17. It is true that there is no direct evidence of any final acceptance by Mr Collaery of the offer put to him by the solicitors for the defendant but, in the absence of any evidence to the contrary, I am satisfied that the circumstances mentioned provide ample grounds for an inference that Mr Collaery had agreed to accept the terms offered by the defendant. The real points of contention were whether he had been authorised to do so and, if so, whether the agreement should be set aside or the plaintiffs otherwise relieved of the need for compliance with it.
18. The plaintiffs have filed affidavits in which they depose to the fact that they had not given Mr Collaery instructions to settle the matter on their behalf. The second plaintiff wrote to the Registrar on 12 April 2006 stating that no agreeement should be made by her “representative attorney” or anyone else to settle the case on her behalf and the first plaintiff delivered a letter directly to Mr Collaery on 2 May 2006 instructing him not to settle the case. At the hearing of the present application, they both maintained that they had not given Mr Collaery instructions to settle their claims, though neither suggested that they had taken any step to limit any implied authority that may have arisen from his initial retainer prior to the letter of 12 April 2006.
19. I should perhaps mention that Mr Collaery clearly acted in the best interests of the plaintiffs in entering into the agreement on their behalf. Apart from a declaration as to the validity of the two certificates that had ceased to have any legal effect more than four years earlier, the only relief sought had been an injunction restraining the defendant from issuing further certificates in identical terms, and the undertaking offered by the defendant had been to the same effect. An undertaking given to this Court is, of course, enforceable in the same way as an injunction. Indeed, the undertaking may have offered the plaintiffs more protection than could have been obtained by means of any injunction that the Court might have been disposed to make. It is unlikely that the Court would have granted an injunction of unlimited duration, at least in the absence of some other form of limitation, such that it subsist only until further order. The undertaking is not so limited. Furthermore, courts are often more reluctant to relieve a party of obligations voluntarily assumed by an undertaking than they are to discharge injunctions imposing obligations on a party against his or her will. The agreement also offered the plaintiffs the benefit of certainty.
20. The plaintiffs’ dissatisfaction with the agreement seems to stem from a misunderstanding of the scope of the proceedings, the issues raised and the utility of the declaratory relief sought.
21. Affidavits were filed concerning the treatment of Falun Gong members in China, that relied upon both first-hand accounts and various reports of wider investigations. The first plaintiff, in particular, spoke of her own experiences in China and of her late husband whom she said had been tortured to death for his commitment to the Falun Gong. No one present could have doubted her sincerity or been moved by the anguish with which she spoke. However, even if not already compromised by agreement, the present proceedings could not have provided any platform from which these issues could have been explored and would not have required, or even permitted, any findings concerning factual issues of this kind.
22. The plaintiffs also complained of an incident earlier this year in which a police bus had been parked on the roadway in front of a Falun Gong protest meeting. They believed that this had been done to wholly or partially obscure the protestors from the view of the Chinese Premier who had apparently been visiting Canberra at that time. It was suggested that the granting of a declaration of the kind sought in the originating application would prevent any such incident from arising in the future. If I may say so, with respect, this was quite misconceived. No issue as to the alleged incident was raised on the pleadings and the AFP is not a party to the action. Accordingly, the present proceedings do not provide any means by which the plaintiffs could question the conduct of the police during that incident or seek orders forstalling similar conduct in the future. No declaration as to the invalidity of a certificate issued by the Minister for Foreign Affairs in March 2002 could possibly affect the rights and duties of member of the AFP in responding to any situations that might arise in future years.
23. The rights enjoyed by citizens in this country to engage in lawful protests are well recognised. Police officers plainly have no authority to interfere with such rights save, of course, to the extent reasonably necessary to prevent violence, arrest offenders or perform any of the other functions specified in s 8 of the Australian Federal Police Act 1979. I see no reason to suppose that any members of the AFP are likely to engage in unwarranted infringements of the rights of the plaintiffs or other Falun Gong members but, even if they were to do so, redress could only be sought in separate proceedings against the AFP, and perhaps the members in question, properly raising the relevant issues.
24. The present application essentially involves only three issues: whether an agreement has been effected for the compromise of the proceedings; if so, whether the proceedings should be dismissed to give effect to the agreement; and, in any event, whether the proceedings should be dismissed on the ground that there are no adequate grounds for the exercise of the Court’s discretion to grant the relief sought by the plaintiffs.
25. More than a century ago, Farwell J said that it was even then clear that a solicitor had a general authority to compromise an action on behalf of a client: see In re Newen; Carruthers v Newen [1903] 1 Ch 812 at 818. During the succeeding century the nature and extent of this authority has been repeatedly discussed and in Waugh and Others v H B Clifford & Sons Ltd and Another [1982] 1 Ch 374 Brightman LJ traced the history of this aspect of the law and provided (at 387) the following succinct summary:
The law thus became well established that the solicitor counsel retained in an action has an implied authority as between himself and his client to compromise the suit without reference to the client, provided that the compromise does not involve matter ‘collateral to the action’; and ostensible authority as between himself and the opposing litigant to compromise the suit without actual proof of authority, subject to the same limitation; and that a compromise does not involve ‘collateral matter’ merely because it contains terms which the court could not have ordered, by way of judgment, in the action.
26. His Lordship also suggested that a liberal approach should be taken to the scope of the ostensible authority that arises from the retainer, excplaining at 398 that:
I think it would be regrettable if this court were to place too restrictive a limitation on the ostensible authority of solicitors to bind their clients to a compromise. I do not think we should decide that matter is “collateral” to the action unless it really involves extraneous subject matter ... So many compromises are made in court, or in counsel’s chambers, in the presence of the solicitor but not the client. This is almost inevitable where a corporation is involved. It is highly undesirable that the court should place any unnecessary impediments in the way of that convenient procedure. A party on one side of the record and his solicitor ought usually to be able to rely without question on the existence of the authority of the solicitor on the other side of the record, without demanding that the seal of the corporation be affixed; or that a director should sign who can show that the articles confer the requisite power upon him; or that the solicitor’s correspondence with his client be produced to prove the authority of the solicitor. Only in the exceptional case, where the compromise introduces extraneous subject matter, should the solicitor retained in the action be put to proof of his authority. Of course it is incumbent on the solicitor to make certain that he is in fact authorised by his corporate or individual client to bind his client to a compromise. In a proper case he can agree without specific reference to his client. But in the great majority of cases and certainly in all cases of magnitude, he will in practice take great care to consult his client, and I think that his client would be much aggrieved if in an important case involving large sums of money he relied on his implied authority. But that does not effect his ostensible authority vis-à-vis the opposing litigant.
27. On the other hand, it has long been clear that a court may set aside a compromise agreement that has been entered under a mistake by counsel for one party and before judgment has been perfected: Hickman v. Berens [1895] 2 Ch 638. This power is said to be derived from the court’s “general authority over justice between the parties”: Neale v Gordon Lennox [1902] AC 465, at 470. See also Shepherd v. Robinson [1919] 1 KB 474 at 477.
28. In Emily Joan Harvey v Coralie Ngarita Phillips and Another (1956) 95 CLR 235 the High Court of Australia explained, at 243-244, that in contracts for the compromise of legal proceedings the possibility of successfully alleging ostensible authority had been much restricted by earlier authorities and that courts will not feel bound to enforce a compromise made by counsel contrary to any restriction that had been placed upon his or her authority, even though the lack of actual authority was not known to the other party. At least until any judgment or order embodying the compromise has been perfected, the courts have power to set aside such a contract and that power will be exercised as a matter of discretion when in the circumstances of the case it would be unjust to allow the compromise to stand in view of the restriction on counsel's authority. Their Honours added, however, that:
… in the case of a compromise which is made within the actual as well as apparent authority of counsel a court does not appear to possess a discretion to rescind it or set it aside. The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.
29. For recent examples of the application of this principle see Buseska v Sergio & Anor (1990) 102 FLR 157 per Higgins J (as he then was); Esanda Finance Corporation Limited & Ors v Rocco Domenic Alvaro & Ors [1998] WASC 390 (18 December 1998) Parker J; McVey v St. Vincent's Hospital (Melbourne) Ltd [2005] VSCA 233 (22 September 2005) per Eames JA, with whom Ashley J.A. and Hollingworth A.J.A. agreed; and Jacobson & McMillan v Ballina Shire Council [2006] NSWLEC 375 per Jagot J.
30. In the present case the agreement relied upon by the defendant appears to have been entered into by Mr Collaery with the actual authority of the plaintiffs. As I have mentioned, both plaintiffs deposed to the fact that they had not authorised Mr Collaery to settle the proceedings on their behalf but, whilst this evidence would support a finding that he did not have express authority to do so, it does not provide any real basis for a finding that the implied authority arising from his retainer had been withdrawn or restricted prior to the agreement apparently made on 3 April 2006.
31. For these reasons I find that there is a valid and subsisting agreement for the compromise of the matter. No ground has been established for any finding that the agreement is void, voidable or otherwise open to being set aside at the instance of the plaintiffs. I accept that they find it unpalatable but it has been validly entered into by their solicitor on their behalf and they are bound by it.
32. I also accept the defendant’s contention that there is a further reason for dismissing the proceedings. Declarations and injunctions are both discretionary remedies. Courts will not make declarations unless it is clear that they will be of sufficient utility to justify the exercise of discretion in favour of the applicants and will not grant injunctions unless, inter alia, there are reasonable grounds to fear that the impugned conduct is otherwise likely to occur. Since the certificates that are the subject of the present proceedings ceased to have any legal effect more than four years ago and the defendant has given an enforceable undertaken not to issue any further certificates in effectively identical terms, the declaration sought by the plaintiffs would have no real utility and there are no grounds for any apprehension that, in the absence of an injunction, the issue of such certificates is likely to be resumed.
33. In short, the plaintiffs have achieved the object of the proceedings, albeit by an undertaking rather than an injunction, and will be free tocontinue their protest without the limitations that had been imposed upon them earlier by the certificates. No further relief is required.
34. Ms Saunders, who appeared for the second plaintiff on this application, made the point that a defendant should not be able to escape liability merely by offering the court an undertaking after proceedings have been instituted against him. That may be true, as a matter of general principle, but when relief of a discretionary nature is sought, the court must take into account all relevant circumstances, including the affect of any such undertaking. The offer of such an undertaking may not, of course, protect a defendant from an order for costs even if other relief is ultimately refused. However, in the present case it has been conceded that the plaintiffs should be paid the sum of $20,000 for costs as agreed.
35. I should mention that whlst the third paragraph of the letter from the AGS on 31 March 2006 stated that the defendant was prepared to pay this sum, the fifth paragraph stated that it would be paid by the Commonwealth. I assume that the latter paragraph simply reflected the practical reality that the Commonwealth would pay the costs on the defendant’s behalf.
36. The proceedings will be dismissed.
37. An application was also made by the first plaintiff for summary judgment but that will, of course, be dismissed along with the substantive proceedings.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Crispin.
Associate:
Date: 14 December 2006
Counsel for the 1st applicant: Self represented litigant
Counsel for the 2nd applicant: Ms J Saunders
Solicitor for the 2nd applicant: Mr M Elmaraazey
Counsel for the respondent: Mr T Howe
Solicitor for the respondent: Australian Government Solicitors
Date of hearing: 1 November 2006
Date submissions received: 22 November 2006
Date of judgment: 14 December 2006