Vulcan Gases Limited V. Gesellschaft Fur Industries Gasverwertung A.G.(G.I.V.) (2001)

LAWGLOBAL HUB Lead Judgment Report

IGUH, J.S.C.

This is an appeal against the judgment of the Court of Appeal, Kaduna Division, delivered on the 3rd day of June, 1992 wherein the Court of Appeal affirmed the decision of R. D. Muhammad, J., as he then was, sitting at the Federal High Court of the Sokoto Judicial Division. The appellant being dissatisfied with the said decision of the Court of Appeal has further appealed, with leave, to this court.

I think it is necessary for a better appreciation of the issues that arise for decision in this appeal to give a background history of the dispute between the parties.

Following an agreement between the parties sometime in 1978, the respondent, Gesellschaft Fur Industries Gasvenvertung A.G. (G.I.V.), a foreign company with its headquarters in Geneva, Switzerland, shipped some quantities of oxygen and acetylene producing machines to the appellant at a total contract price of U.S. $606,852.00. The goods were cleared by the appellant from the Nigerian Ports Authority in Lagos without the production of the original Bill of Lading and it thereby avoided payment for the said machines. When the appellant failed to pay the purchase price of the goods, the respondent was obliged to commence a winding-up proceedings in suit No. FHC/KD/3/82 against the appellant at the Sokoto Judicial Division of the Federal High Court. This was with a view to recovering from the appellant the total contract price of U.S. $606,852.00 for which the goods were sold.

In the course of the proceedings, the parties went into negotiation with a view to resolving their differences out of court and the learned trial Judge was duly informed of this development on the 8th day of June, 1983. The negotiation was between Counsel for the two parties. In particular, the respondent, through its solicitors in Geneva, drew up its terms of settlement and got the same delivered to its Counsel in Nigeria on the 22nd November, 1983 with clear instructions to settle the case strictly on the conditions therein stipulated.

For some undisclosed reasons, however, the respondent’s Counsel in Nigeria on the 6th November, 1986 purported to agree to terms of settlement with the appellant’s Counsel which were at complete variance with those which his client had authorised. When the respondent became aware of this unauthorized development, it wrote to both its Counsel in Nigeria and to Counsel for the appellant stating categorically that it did not authorise the settlement on the terms in question and that it unequivocally rejected the same. This is on the ground that its Counsel in Nigeria had exceeded the express written instructions and authority given to him by the respondent. These letters were both dated the 18th December, 1986. The respondent in those letters made it clear that it did not recognise the validity of the transaction entered into by its Counsel. In reply, however, the appellant’s Counsel asserted that the authority of the said respondent’s Counsel to bind his client could not be questioned and that he would therefore insist on the recognition of the disputed terms of settlement of the claim. For his own part, the respondent’s Counsel in Nigeria wrote to the Registrar, Federal High Court, Sokoto, on the 14th day of May, 1987 conveying his client’s rejection of the disputed terms of settlement. The immediate reaction of the appellant’s Counsel was to address their letter of the 25th May, 1987 to the respondent’s Counsel stating that they had since filed a copy of the terms of settlement in court and that they would proceed to seek judgment based thereunder. This was inspite of the fact that they had been effected with actual notice that the said Terms of Settlement were in dispute and unacceptable to the respondent on the ground that they were reached by the respondent’s Counsel without authority and contrary to his instructions.

Although the appellant’s Counsel by their letter of the 25th May, 1987, to the respondent’s Counsel claimed that a copy of the Terms of Settlement had been filed by them in court, it is instructive that this representation was in fact incorrect. It was not until two months thereafter. That is to say, on the 27th July 1987 that the appellant’s Counsel went ahead to file the alleged Terms of Settlement in court. Strangely enough, it was on the same day, that is to say, the 27th July 1987 that the appellant’s Counsel moved the court in the absence of the respondent and its Counsel to enter judgment in the suit in terms of the disputed Terms of Settlement. The fact that there was a dispute as to the said Terms of Settlement was, however, not brought to the notice of the court by learned Counsel for the appellant. It was under such circumstance that the learned trial Judge. Ofili. J., in the mistaken belief that the purported Terms of Settlement represented the true agreement between the parties entered a consent judgment in respect thereof. He observed:

“…….. I am satisfied that the terms of settlement constitute the mutual agreement of the parties and I therefore enter judgment on terms of the settlement in Exhibit A.

No order as to costs,” (Italics supplied)

In consequence of this development, the respondent engaged the services of the law firm of Beatrice Fisher and Company, Legal Practitioners and instructed them to apply for the consent judgment to be set aside. This fresh proceeding which was commenced at the Federal High Court, Sokoto Judicial Division by way of Originating Summons is the origin of the present appeal. The originating summons was commenced by the respondent by its lawful attorney, one Olaniyi Okunlola Esq., a Barrister and Solicitor in the chambers of Beatrice Fisher and Co.

By the said Originating Summons dated the 27th day of June, 1988 the respondent, as the applicant, sought for the following orders:-

“1. A declaration that the consent judgment dated the 27th July, 1987, and given by this Honourable Court in. Suit No. FI-IC/KD/3/82, was given under a mistake of fact and misrepresentation, and is therefore a nullity.

2. A consequential order setting aside the consent judgment dated the 27th day of July, 1987.
3. An order directing that any amount of money that has been paid or which remained to be paid under the terms of Settlement dated 6th November, 1988. Exhibit “2” herein, be paid to this Honourable Court, pending the final determination of the actual liability of the respondent to the petitioner in Suit No. FHC/KD/3/82.”

At the hearing of the originating summons, the appellant herein raised a preliminary objection to the competence of the action. This was on the ground that the said Mr. Okunlola had not obtained a Power of Attorney at the time he filed the action, authorising him to institute the proceeding for and on behalf of the respondent. It was his submission that before a party could commence an action, it must be shown that he had locus standi in the matter. (Italic mine)

In his ruling delivered on the 25th January, 1989 the learned trial Judge considered the arguments in respect of the preliminary objection and dismissed the same. Upon a careful consideration of the prayers in the originating summons, the court granted reliefs 1 and 2, holding that the consent judgment was given under misrepresentation and mistake of fact. Accordingly, it set aside the said consent judgment made on the 27th July, 1987. The learned trial Judge, however, refused to gram prayer 3 but ordered instead that the sum of N247,625.53 paid to the respondent’s solicitors by the appellant for delivery to the respondent which amount the former held on to, be returned to the appellant forthwith. In his view, the money was paid under a mistake in that there was no agreement between the parties in respect of the payment and no useful purpose would, therefore, be served by paying the same into court pending the determination of the appellant’s actual liability as prayed for Said he :-

‘The application succeeds and accordingly I make the following orders:-

1. The consent judgment dated 27th July 1987 and given by this court in Suit No. FHC/KD/3/82 is a nullity because there was no agreement between the parties.
2. The said consent judgment dated 27th July, 1987 is hereby set aside.

I do not think it is just and equitable to order the money paid under the terms of settlement to be paid to this court pending the determination of the respondent’s actual liability. There was no agreement between the parties, therefore, any money paid pursuant to the said agreement was money paid under a mistake and it should be returned to the defendant. I therefore order that the sum of N247,625.53 paid by the Defendant to the Plaintiff’s Solicitors be returned to the defendant forthwith.”

Dissatisfied with this decision of the trial court, the appellant lodged an appeal against the same to the Court of Appeal, Kaduna Division. That court in a unanimous decision dismissed the appeal, holding that in-as- much-as the parties were not ad idem in respect of the terms of settlement upon which the trial court erroneously acted, they could not form the basis of or sustain a consent judgment as known to law. It was therefore of the opinion that the trial court was right to have set aside the said consent judgment.

Aggrieved by this decision of the Court of Appeal, the appellant has further appealed to this court.

Six grounds of appeal were filed by the appellant against this decision of the Court of Appeal: It is unnecessary to reproduce them in this judgment. It suffices to state that the parties pursant to the rules of this Court filed and exchanged their written briefs of argument.

The four issues distilled from the appellant’s grounds of appeal set out on their behalf for the determination of this appeal are as follows: –

“(1) Whether a person who had no locus standi at the time he commenced proceedings as a donee of a power of attorney can continue the action as such based on a power of attorney issued after the commencement of the action.

(2) Whether the provisions of Order 20 rule 5(4) of the English Supreme Court Rules and the cases of

a. Gbogbolulu of Vakpo v. Chief Hodo of Anfoega Akukome (1941) 7 WACA 165

b. Azuike Ume & Others v, Alfred Eze Eki & Ors delivered on 30th December. 1957 are authority for regularizing otherwise null proceedings.

(3) Whether the Court of Appeal was right when it affirmed the decision of the Federal High Court which set aside the consent judgment in Suit No: FHC/KD/3/82 entered and based on the terms of settlement agreed upon by the appellant’s and respondent’s solicitors.

(4) Whether the Court of Appeal can suo motu determine the naira equivalent of USD $306,853 in 1986 and proceed to give judgment on such finding when the rate of exchange was never made an issue before the court, no evidence was led as to the applicable rate, and the court of Appeal did not give the parties any opportunity to address it on the issue”

The respondent on the other hand submitted three issues in its brief of argument as arising in this appeal for determination. These are couched thus: –

1. Whether the Court of Appeal was correct in affirming the decision of the Federal High Court that it had jurisdiction to entertain the suit of the respondent.
2. Whether the Court of Appeal was correct in affirming the decision of the Federal High Court that set aside the consent judgment in Suit No. FHC/KD/3/82 in the entire circumstances of the case.
3. Whether, in the entire circumstances of this case, the Court of Appeal was wrong to have held that payment of US $306.852 American Dollars in 1986 could not be in anyway equivalent to N247.625.53 and whether any miscarriage of justice was occasioned to the appellant thereby.”

There can be no doubt that the set of issues identified in the respondent’s brief of argument fully covers those set out in the appellant’s brief of argument. However, issue 3 formulated in the respondent’s brief which corresponds with the appellant’s issue 4 does not seem to me relevant in the determination of this appeal. The central question before the court below was whether the parties were in concensus ad idem on the essential terms that were entered as consent judgment by the trial court and, if not, whether the said consent judgment is liable to be set aside. In my view, therefore, issues 1 and 2 set out in the respondent’s brief of argument are amply sufficient for the determination of this appeal.

At the oral hearing of the appeal, both learned Counsel for the parties adopted their respective briefs of argument and proffered additional submissions in amplication thereof.

The main contention of learned Counsel for the appellant, A. Oyeyipo Esq. in respect of issue 1 is that as at the 27th June 1988 when Mr. Olaniyi Okunlola commenced the present action at the Federal High Court he had no Power of Attorney authorising him to institute the same for and on behalf of the respondent company. He pointed out that from the reliefs claimed, it is apparent that Mr. Olaniyi Okunlola had no personal or proprietary interest in the subject matter of the action. He therefore argued that Mr. Okunlola had no locus standi to commence or prosecute the action. He referred to the decisions of this court in Green v. Green (1987) 3 NWLR (Pt. 61) 480 and Madukolu v. Nkemdilim (1962) 2 SCNLR 341, (1962) 1 All NLR 587 and submitted that the respondent’s Originating Summons was incompetent and that the court had no Jurisdiction to entertain the same. He called in aid the decision of the West African Court of Appeal In Chief Efiong Duke v. Ewbom Henshaw (1940) 6 WACA 200 and submitted that failure by Mr. Okunlola to establish his authority to sue as the accredited agent or attorney of the respondent company as at the 27th day of June. 1988 when the Originating Summons was filed is fatal to this proceeding. He stressed that it was not until the 18th July, 1988 that the Power of Attorney constituting Mr. Okunlola the respondent’s agent and authorising him to prosecute the proceeding for and on behalf of the respondent was executed. He submitted that once the originating summons was filed without authority. It remained a nullity and no amount of subsequent ratification could cure the defect.

Learned Counsel for the respondent. Dr. B.O. Babalakin in his reply, Referred to the provisions of Order 20 rule 5(4) of the Rules of the Supreme Court of England which state as follows: –

“An amendment to alter the capacity in which a party sues may be allowed under paragraph (2) if the new capacity is one which the party had at the date of the commencement of the proceedings or has since acquired.”

Learned Counsel made reference to the statements of the law on the subject by the learned authors of Halsbury’s Laws of England. 4th Edition. Vol. 37. Page 209, Para. 276 and Note 310 Para. 115 at Page 88 as well as to The Supreme Court Practice (The White Book) 1997 Edition. Vol. 1. Para. 20/5 at Pages 356 – 357, Para. 20/5 – 8/17 al Pages 366 – 367. He noted, citing the decision in Chief Gbogbolulu of Vakpo v. Head Chief Hodo of Anfoega Akukome (1941) 7 W.A.C.A. 164 that the reasoning of the court below with regard to the point in issue was the overriding need to do substantial justice to the parties rather than adhere to strict technicalities that may result in defeating the ends of justice. He stressed that Mr. Okunlola did not purport to sue for himself but that he sued expressly on behalf of the respondent. He also pointed out that it was never disputed that Mr. Okunlola was the lawful attorney of the respondent. The complaint of learned Counsel for the appellant is that the Power of Attorney issued to Mr, Okunlola was executed a few days after the originating summons was filed, This is inspite of the fact that the respondent had expressly deposed on oath as far back as on the 14th April, 1988 that the firm of Beatrice Fisher and Co. in which Mr. Olaniyi Okunlola was a partner had been instructed and authorised to institute an action to set aside the consent judgment entered at the Federal High Court on the 27th July, 1987. He urged the court to resolve this issue in favour of the respondent.

As already indicated, the appellant’s complaint under issue 1 is that the Federal High Court had no jurisdiction to entertain the respondent’s case because when the action was commenced by Mr Olaniyi Okunlola, he purported to act as agent or Attorney of the respondent when in fact he did not have the requisite authority to do so, I think the question for resolution under this issue will be better appreciated if the basic principles governing the relationship of principal and agent are briefly considered.

Usually, the relationship of Principal and agent may arise in anyone of five ways, namely: –

1. By express appointment whether orally or by letter of appointment or, indeed, by a Power of Attorney, Under this heading. No formality, such as writing is required for the valid appointment of an agent except for instance, where the authority of the agent is to execute a deed on behalf of a principal. in which case, the agency itself must be created by deed.
2. By ratification of the agent’s acts by the principal. See for example Bird v. Brown (1850) 4 Exch 786. Firth v. Staines (1897) 2 QB. 70 etc. This mode of creation of agency is sometimes expressed in the maxim omnis ratihabitio retrotrahitur et mandato priori aequiparatur:
3. By virtue of the doctrine of estoppel.
4. By implication of law in the case of agency of necessity and
5. By presumption of law in the case of cohabitation.

The issue under consideration is only concerned with the first two of the five ways under which the relationship of principal and agent may arise.

It cannot be seriously disputed that the respondent before the institution of the present proceeding did authorise and/or instruct the law firm of Beatrice Fisher and Co. to institute an action to set aside the consent judgment entered at the Federal High Court on the 27th day of July, 1987 in suit No. FHC/KD/3/82. This is deposed to in the affidavit of one Rene Merkt, a director of the respondent company as far back as on the 14th April, 1988 well before the originating summons was filed. This is per paragraph 21 of his said affidavit of the 14th April. 1988. It is not in dispute that Mr. Olaniyi Okunlola was at all material times a Counsel in the firm of Beatrice Fisher and Co. It is also clear on the face of the originating summons itself that the action was brought by the Mr. Okunlola as the lawful Attorney, of the respondent company. He did not purport to sue for himself. The respondent repeatedly affirmed that it aurhorised Mr. Okunlola to be its agent in the matter of the present proceeding for the setting aside of the disputed consent judgment. I think, in these circumstances that one may say without any fear of contradiction that the respondent, by express appointment, had constituted Mr. Okunlola its agent in the matter of the prosecution of the proceeding in issue.

Learned Counsel for the appellant did, however, concede that the respondent subsequently executed a Power of Attorney formally constituting Mr. Okunlola its lawful agent to represent the company in the litigation with the appellant. This Power of Attorney was executed on the 18th July, 1988, after the originating summons was filed. Learned Counsel then contended that the originating summons having been filed by Mr. Okunlola as attorney of the respondent before the execution of the Power of Attorney, the proceeding was incompetent, null and void. This now brings me to the Constitution of agency by subsequent ratification of the agent’s acts by the principal.

The effect of ratification of an agent’s act is to put the parties concerned in the same position as that in which they would have been if the act ratified had been previously authorised. Thus, even if an action is commenced without the authority of the purported plaintiff and is therefore incompetent and improperly constituted, the plaintiff can ratify his solicitors act, so that it will no longer be open to the defendant to object that the action is not properly brought. See Damish Mercantile Co. v. Beaumont (1951) Ch. 680. It does not, therefore, seem to me a correct proposition of law as contended by teamed Counsel for the appellant that where an action is brought without the authority or the purported plaintiff, such an action is automatically rendered a complete nullity and that no amount of subsequent ratification can cure the defect. I think that view of the law. With respect, is totally erroneous, misconceived and it is hereby rejected.

I should perhaps, mention that this position of learned Counsel for the appellant. Mr Oyeyipo was vigorously canvassed in the Danish Mercantile Co. v. Beaumout case (supra) by the learned defence Counsel in that case. Mr. Shelley. Q. C. In this connection, Mr. Shelley referred to a number of decided cases which, in his opinion supported his contention. The Court of Appeal in England after an exhaustive and painstaking analysis of the authorities referred to by the learned Queen’s Counsel had no difficulty in rejecting this novel proposition of law. Dismissing the same in a unanimous decision of that court. Jenkins, LJ. who delivered the leading judgment had this to say: –

“I find nothing in any of those cases to constrain me to hold that the issue of a writ and the commencing of an action without the authority of the purported plaintiff is a matter which admits of no validation by subsequent ratification of the act of the solicitor concerned. So to hold would be to introduce, as I see it, an entirely novel doctrine into the ordinary law of principal and agent and to make a new exception to the general rule that every ratification relates back and is deemed equivalent to an antecedent authority.

In the absence of any decision compelling me to do so, I, speaking for myself decline so to hold. I agree with what was said by Roxburgh, J., and I think that he rightly took the view that to accede to Mr. Shelley’s contention would be inconsistent with the authorities in which questions of this kind have arisen, particularly in relation to companies.”

I need hardly add that Hodson, LJ. was equally of the same view. Said he :-

“I am prepared to assume as did my Lord and the Judge, that the proceedings were instituted without authority,…………I, like my Lord, would rest my judgment on the presence of ratification………….. I see no difficulty in Roxburgh, J’s view, which I think is perfectly correct, that the act of the liquidator in this case has been sufficient to ratify such defect, if any, as previously existed.

For these reasons as well as for those given by my Lord, I agree that this appeal fails.”

I have given the above observations of Jenkins and Hodson, L.JJ, a most careful consideration and must gratefully endorse them as sound and well founded. I am therefore prepared to hold that if an action is commenced without the authority of the purported plaintiff and is therefore not properly constituted, such a plaintiff can ratify his solicitor’s act and it may then not be open to the defendant to object that the action is not properly before the court.

Learned Counsel for the respondent did concede that there is no doubt that a plaintiff ought ordinarily to be invested with the capacity in which he sues at the date on which the action is instituted. With this submission, I am in full agreement. However, he next submitted that the failure to do so need not be fatal to the action especially where the plaintiff acquires the capacity after the issue of the writ. With this proposition, I am again in complete agreement. But learned Counsel tried to justify his position by reference to statements of the law in both Halsburys Laws of England, 4th Edition and The Supreme Court Practice, 1997 already mentioned earlier on in this judgment. I need only mention that a close study of those citations reveals that they deal essentially with the amendments of writs and/or pleadings. In particular, they concern amendments to alter the capacity in which a party sues. The question that has arisen for consideration in this appeal has nothing to do with any amendments of whatever nature but with whether or not an action commenced without the authority of the named plaintiff and therefore incompetent may subsequently be saved by ratification by such a plaintiff. I have, with respect, therefore, not found the said citations of learned Counsel very helpful in the determination of the issue under consideration.

As I have indicated, the only point raised by the appellant is that at the time Mr. Okunlola instituted these proceedings, he did not have the Power of Attorney pursuant to which he was acting. The records, however abundantly show that not only did the respondent authorise him to institute the claim and for him to represent the company as its agent, the much talked about Power of Attorney was in fact executed and given to Mr. Okunlola before the hearing of the Originating Summons was commenced by the court.

One last word must be said before I am done with issue 1. This has to do with the submission of learned Counsel for the respondent that the issue whether or not the suit was properly commenced and whether or not Mr. OKunlola had the requisite authority to commence the action is no longer a live issue in this proceeding. I find myself in total agreement with learned respondent’s Counsel in this regard. Before this court on the 24th February, 1997 upon an application brought by the respondent, the name of the said respondent to wit. Gesellschaft Fur Industries Gasverwertung A. G. (G.I.Y.) was substituted in place of Mr. Olaniyi Okunlola. This application was not opposed by the appellant. It was accordingly ordered that Mr. Okunlola who instituted the suit in his own name as the lawful attorney of the respondent be substituted by the respondent company, the donor of the Power of Attorney. It was further ordered that all the processes in the cause be amended accordingly to reflect the proper parties to the action.

I think I ought to observe, in the first place, that this amendment of the 24th February, 1997 which was not opposed in no small way helped to save this proceeding. This is because, the donee of a Power of Attorney or an agent in the presentation of a court suit or action pursuant to his powers must sue in the name of the donor or his principal and not otherwise. See Timothy Ofodum v. Onyeacho 1966/67 10E.N.L.R. 132;Jones v. Gurney (1913) WN 72; John Agbim v. Mallam Gamba Jemeyita (1972) 2 ECSLR 365. In the second place, it is beyond dispute that an amendment relates back to the commencement of a suit. An order of amendment takes effect, not from the date when the amendment is made or granted but from the date of commencement of the action. In other words, once ordered, what stood before amendment is no longer material before the court and no longer defines the issues to be tried. See Grace Amanamhu v. Alexander Okafor & Another (1966) 1 All NLR 205; Warner v. Sampson (1952) 2 WLR 109; Col. Rotimi v. Mc Gregor (1974) 11 SC 133 at 152; Osita Nwosu v. Imo State Environmental Sanitation Authority (1990) 2 NWLR (Pt.l35) 688. Accordingly, having regard to the amendment of the 24th February, 1997, it must be deemed that it was the respondent itself that commenced this action in its own name ab initio and, all arguments relating to whether or not Mr. Okunlola had locus standi at the time he commenced the proceeding as a donee of a Power of Attorney automatically go to no issue. On the whole, it is my view that having regard to all that I have stated above, issue 1 must be resolved against the appellant.

Issue 2 poses the question, whether the Court of Appeal was correct in affirming the decision of the trial court that set aside the consent judgment in issue in all the circumstances of the case. It is the submission of learned Counsel for the appellant that the court below was in error to have set aside the consent judgment entered by the trial court as the same had been agreed upon and signed on behalf of the parties through their respective Counsel. He also contended that since he was not aware of any limitation to the authority of the respondent’s Counsel in the matter of the settlement, the respondent must be bound by the agreement entered into by Counsel on its behalf.

Learned Counsel made the point that it was not the parties that were negotiating but their respective Counsel and that once they were ad idem on the terms of settlement, the views of their clients would not matter. In support of these submissions, Counsel called in aid the decisions in Mosheshe General Merchants Ltd. V. Nigerian Steel Products Ltd. (1987) 1 NWLR (Pt.55) 110 and Adewunmi v. Plastex Limited (1986) 3 NWLR (Pt.32) 767.

Learned Counsel for the respondent, on the other hand was prepared to accept that the general principles of the law in this regard are to the effect that Counsel has authority, except expressly limited, over the whole of a court action and all matters incidental to it and to the conduct of the trial. It was, however. His submission that while these principles may be correct, they are still general statements of the law and that the court still has the discretion to examine the entire circumstances of the case in order to determine whether the compromise entered into should be sanctioned by the court. Learned Counsel made reference to the case of Neale v. Gordon Lennox (1902) A. C. 465 where, he stated, that the House of Lords held that Counsel has no authority to refer an action against the wishes of his client or upon terms different from those which his client has authorized and that if he does so refer it, the reference may be set aside although the limit put by the client on his Counsel’s authority is not made known to the other side when the reference was agreed upon. He also relied on the decision in Marsden v. Marsden (1972) 2 All E.R. 1162. He stressed that as at the time the consent judgment was entered by the trial court, the parties were clearly not in agreement as to its terms and that this was to the knowledge of the appellant whose Counsel failed to bring this material fact to the notice of the court. It is also instructive that the consent judgment was entered by the trial court in the absence of both the respondent and its Counsel. He submitted that the court below rightly affirmed the decision of the trial court that set aside the consent judgment.

On the desirability of setting aside the consent judgment on the ground of nullity, the learned trial Judge had this to say :-

“In this case, the client has rejected the terms of settlement, he did not only inform his Counsel about the rejection, he also took the trouble to inform the defendant’s Counsel about the rejection. It is my opinion that it will be manifestly unjust to force the plaintiff to accept the terms entered into by his Counsel without his authority. This is more so if we consider the plaintiff’s solicitor’s letter to the court dated 14th May 1987 i.e. Exh. 4 annexed to the plaintiff’s affidavit. The letter was received by the court on 21st May 1987 in which they said:”

We are reliably informed that a copy of the terms of Settlement reached by Solicitors in the above suit has been filed at the Federal High Court, Kaduna. Please take note that the said Terms of Settlement have been rejected by our clients, the Petitioner in this suit.”

The consent judgment was given on 27th July 1987 i.e. about two months after Exhibit 4 was received by the Court. Had the Court adverted its mind to Exhibit 4.1 am sure it wouldn’t have entered judgment as per the terms of settlement filed. In the circumstance, I think this is a proper case to declare the consent judgment a nullity because there was no agreement between the parties.”

Now, before the Court of Appeal, the question it posed for itself in the determination of the issue under consideration was couched thus:

“The vital question to ask is, are the parties ad idem in their agreement before the terms of settlement were filed in court”

After a close consideration of the facts as presented before the court, the court below proceeded to proffer its answer to the above question as follows:-

“Now from what I narrated above, is it correct to say that the appellants and the respondents were ad idem before Ofili J. made the Terms of Settlement a consent judgment. It is crystal clear that the parties were not ad idem over the Terms of Settlement registered in court by the Counsel to the appellants. The learned Counsel was quite aware of the fact that the respondents had rejected the terms agreed between Alayande and the appellants.

It is quite plain that the compromise reached between Alayande and the appellants which they called Terms of Settlement was not a consent judgment.”

A little later in its judgment, the Court of Appeal added:-

“In view of the facts I have given above, it is quite clear that what Ofili J. entered as settlement agreement between the appellants and the respondents and made as a judgment of his court was not a consent judgment. Thus, in my strong opinion, the judgment could be set aside. No consent judgment can bind in any form a party who is not shown to have consented to it and if it is discovered that the consent judgment had been obtained by fraud or misrepresentation the judgment can be set aside by a fresh action …. I do not entertain any doubt that if Ofili J. had known that the respondents had not agreed to the terms of settlement presented before his court, he would not have entered the consent judgment on 27/7/87. Since what the respondents filed was a fresh action before Rabiu Danlami Mohammed J. (as he then was) the decision of the learned judge whereby he set aside the consent judgment entered by Ofili J. is quite in order,”

I have given a very close thought to the above observations and conclusions of both courts below and confess that I find it difficult to fault them. Before, however I deal further with the issue, it is necessary to set out the grounds pursuant to which the respondent applied to the trial court to set aside the consent judgment in dispute. These are set out in the following paragraphs of the affidavit of Mr. Rene Merkt, a Director of the respondent company. They aver as follows

“11. That on the 22nd November, 1983 the applicant through their Solicitors in Geneva, Switzerland, Etude de Me Rene MERKT, Advacat au Barreau de Geneva, drew up a proposed settlement terms and had same delivered to Mr. Alayande with the instructions that the terms contained in the draft must be adhered to strictly. The said proposed terms of settlement is attached hereto and marked Exhibit 1.

12. That contrary to the said limits of the Applicant’s instructions, Mr. Alayande exceeded the express instructions and introduced some clauses which were detrimental to the Applicant’s interest into the terms of settlement he entered into with the respondent. That a certified true copy of the terms of settlement as filed by the respondent’s Counsel is attached herewith and marked Exhibit 2.
13. That immediately the Petitioner became aware of Mr. Bojude Alayande’s deviation from the Applicant’s instruction, the Applicant on the 18th day of December, 1986 wrote to both Mr. Alayande and Messrs Abdulahi Ibrahim & Co. Counsel for the respondent rejecting the settlement as per Exhibit 2 above.
14. The Applicant’s letters to both Counsel for the respondent and Mr. Alayande are attached hereto and marked Exhibits 2A and 3B respectively.
15. That on the 22nd day of December, 1986, Messrs Abdulahi Ibrahim & Co. wrote to the Applicant insisting on recognising Mr. Alayande’s representation despite the withdrawal of the Applicant’s authority from Mr. Alayande to represent them.
16. That on the 14th May, 1987. Mr. Bolude Alayande wrote to this Honourable Court’s Registrar, bringing the fact of lack of the Applicant’s consent to Exhibit 2 to the attention of the Court. A certified true copy of the said letter is attached hereto and marked Exhibit 4.
17. That on the 27th July, 1987, unknown to the Applicant and without any authority in that behalf, the respondent’s Counsel Mr. S. M. Onekutu on behalf of Messrs Abdulahi Ibrahim & Co. filed the said Exhibit 2 and urged this Honourable Court on the same day to make Exhibit 2 a consent judgment of the court.
18. That the Court under a mistaken belief that Exhibit 2 represented the agreement of both Petitioner and respondent entered a consent judgment based Upon Exhibit 2.
19. That produced and showed to me is the certified true copy record of proceedings of the 27th day of July, 1987. It is attached herewith and marked Exhibit 5.
20. That produced and showed to me is a certified true copy of the drawn-up order based upon Exhibit 5. The drawn-up order is attached herewith and marked Exhibit 6.
21. That the Applicant has since instructed the Firm of Beatrice Fisher & Co. to apply for the consent judgment to be set aside by this Honourable Court.”

Although the appellant filed a counter-affidavit in which it only denied the facts deposed to in paragraphs 15, 17, 18 and 21 of the said affidavit, its main contention is that it was not privy to the instructions handed to the respondent’s Counsel by its client, nor was it aware that the respondent’s Counsel had any limited instructions to negotiate settlement. It is however indisputable that the respondent’s Counsel had limited and written instructions, that the compromise agreement he reached with the appellant’s Counsel was at variance with and contrary to his client’s clear instructions and that the said agreement was immediately repudiated by the respondent the moment it was communicated to it.

There is also no doubt that both the trial court and Counsel for the appellant were advised in writing by the respondent that it had unequivocally rejected the purported terms of settlement as unauthorized and that the appellant responded by insisting on the recognition of the disputed terms of settlement. It was two months after the appellant received notice of the respondent’s repudiation of these disputed terms of settlement that it made good its threat by getting the trial court to make the rejected terms of settlement a consent judgment. This, the appellant did, in the absence of both the respondent and its Counsel. It is also clear from the record of proceedings that at no time did the appellant’s Counsel intimate the court that the said terms were not only disputed but that they had been rejected outright by the respondent and that the parties as at that date were not ad idem, on the issue. On the contrary, the impression conveyed to the trial court was that the terms represented the mutual agreement between the parties. Indeed, it cannot be doubted that the trial court entered a consent judgment in the matter in the mistaken belief that the terms represented the genuine agreement between both parties.

Said the learned trial Judge:-

“I am satisfied that the terms of settlement constitute the mutual agreement of the parties and I therefore enter judgment on terms of the settlement in Exhibit A.

No order as to costs.”

It is against the above background that I will now consider whether the court below was right in affirming the decision of the trial court which set aside the controversial consent judgment. And I ask myself, in the first instance, whether a consent judgment is liable to be set aside at all.

It is long settled that a consent judgment or order made by a court to give effect to the compromise of a legal claim by the parties may be set aside, not only on the ground of fraud, but for any other reason which would afford a good ground for setting aside the agreement on which the judgment or order is based, e.g. on the ground of a common mistake, fraudulent misrepresentation or misconception. See Attorney-General v. Tomline (1877) 7 Ch. D. 388, Huddersfield Banking Company Ltd. v. Henry Lister and Son Ltd. (1895-99) All E.R. 868 (C.A.).

Similarly, an order, be it by consent or otherwise, which is a nullity is something which the person affected thereby is entitled to have set aside ex debito Justitiae. The court in its inherent jurisdiction has definite jurisdiction or power to set aside its own order or decision made without jurisdiction if such order or decision is in fact a nullity and an appeal in such circumstance cannot be said to be necessary. It can thus be said that outside the appellate procedure, a judgment or order can be set aside if it is a nullity or where a court was misled into giving the judgment by some mistake, believing that the parties consented to its being given, whereas, in fact, they did not. See Craig v. Kanseen (1943) K.B. 256 or (1943) 1 All ER 108 at 113; Okoli Ojiako and others v. Onwuma Ogueze and Ors. (1962) 1 All NLR 58; Ekerete v. Eke 6 NLR 118.

It is thus clear that apart from fraud which, if established in any judgment or order, necessarily invalidates the same, a consent judgment or order may be set aside for cogent and sufficient reason which in law would constitute a ground for setting aside the agreement on which such consent judgment or order was based. As Lindley, LJ. put it in Huddersfield -Banking Company Ltd. v. Henry Lister and Son Ltd. (supra) at Page 871:-

“A consent order, I agree, is an order, and so long as it stands, it must be treated as such, and so long as it stands I think it is as good an estoppel as any other order. I have not the slightest doubt on that point. But that a consent order can be impeached not only on the ground of fraud but upon any grounds which invalidate the agreement it expresses in more formal way than usual. I also have not the slightest doubt.”

I will now consider whether there are grounds, be they fraud or otherwise, which invalidate the agreement the consent judgment in question expresses. This question is closely connected with two other issues. These concern the right of a party to a court proceeding to repudiate the actions of his solicitor and whether what Ofili, J. entered as a consent judgment based on the purported compromise agreement between the parties is truly a consent judgment as known to law.

Dealing with the last question first, I think I ought to observe that if it was established that the parties in the present case had, with full knowledge of the alleged compromise agreement, freely and voluntarily agreed on the terms therein and proceeded to apply to the court to enter judgment on those terms, the consent judgment of Ofili, J. in dispute would, without doubt, be a final judgment from which the parties could appeal only by leave of the court. As it was said by this court in Abel Woluchem v. Dr. Charles Wokoma (1974) 3 S.C. 153 per Ibekwe, J.S.C.: –

“The rule is that actions may be settled by consent during the trial, usually, such settlement is a compromise and, in order to have binding effect on the parties, it is imperative that it should have the blessing of the court. Settlement between the parties may be described as a contract whereby new rights are created between them in substitution for, and in consideration of, the abandonment

of the claim or claims pending before the court. When the court moves and takes action as agreed upon by the parties, it becomes a consent judgment”

In order to have a consent judgment, therefore, the parties must reach a complete and final agreement on the vital issue in their terms of settlement. They must be ad idem as far as the terms of their compromise agreement are concerned and their consent must be free and voluntary. The consent judgment emerges the moment the court on the application of the parties enters such compromise agreement as the judgment of the court. The position was explained by this court per Ibekwe, JSC in Abel Woluchem v. Dr. Charles Wokoma (supra) as follows: –

“As far as we can discern from the record of appeal, the parties never reached a complete and final agreement on the issue of settlement………..In order to have a consent judgment, the parties

must be ad idem as far as the agreement is concerned; their consent must be free and voluntary when the court makes an order based upon such terms of settlement, there emerges a consent judgment, from which the parties could appeal only by leave of the court.”

Where, however, purported consent judgment is vitiated by fraud, mistake, misconception or by any other vice which would afford a ground for setting aside the compromise agreement on which the order was based, no true consent judgment binding on the parties would have emerged. The result, in such a case is that the so called consent judgment can be set aside but by a fresh action. See Talabi v. Adeseye (1972) 8-9 SC 20. The court, therefore, has discretionary jurisdiction to examine the entire circumstances of a case in order to determine whether the alleged compromise agreement entered into by the parties should be sanctioned and made an order of court. It is this jurisdiction that the respondent in the present application invited the trial court to exercise, alleging that the consent judgment in issue was vitiated by mistake and misconception and that there was, in fact, no concensus ad idem between the parties in the terms of the compromise agreement which were the basis of the consent judgment. I will now briefly dispose of the right of a party to repudiate the action of his solicitor.

The general principle of the law is that at the trial of an action the authority of Counsel extends, when it is not expressly limited, to the whole of the court action and all matters incidental to it and to the conduct of the trial. See Sourendra Nath Mitra v. Srimati Tarubala Dasi (1930) 46 T.L.R. 191 PC. This general principle, however, does not and has not fettered the discretion of the court where it deems it fit so to exercise the same. See Adewunmi v. Plastex Ltd (1986) 3 NWLR (Pt. 32) 767 at 785.

In this regard, it cannot be disputed that where Counsel by the authority of his client and with full knowledge of the facts consents to an order, there being no mistake or surprise in the case, the client cannot arbitrarily withdraw such consent, and the court may proceed to perfect the order but without prejudice to any application which the other side might make to the court to be relieved from his consent all the ground of fraud, mistake, misrepresentation or surprise or for other cogent and sufficient reason. See Harvey v. Croydon Union Rural Sanitary Authority (1884) 26 ChD. 249, CA, Holt v. Jesse (1876) 3 Ch. D. 177. But if it is established that Counsel agreed to the consent order being made under some misapprehension, the court will not hold him or his client to the agreement. See Shepherd v. Robinson (1919) 1 K.B. 474, C. A. Where the authority of Counsel has been expressly limited by the client and Counsel has in defiance consented to an order or judgment contrary to his client’s clear instructions, various considerations would appear to arise. If the limitation of authority is known or communicated to the other side, consent of Counsel outside the limits of his authority and in breach of the express instruction of his client will be inconsequential and of no effect. See Strauss v. Francis (1866) L.R. 1 Q. B. 379 at 382. Where, however, the limitation of authority is unknown to the other side who enters into the compromise in the belief that the opponent’s Counsel has the ordinary unlimited authority of his client, the position would appear, to some extent, to be fluid and uncertain. In such situation the learned authors of Halsbury’s Laws of England, 4th Edition, Volume 3, paragraph 1182 have formulated the applicable true rule under the circumstance as follows: –

“But the true rule seems to be that in such case the court has power to interfere; that it is not prevented by the agreement of Counsel from setting aside or refusing to enforce a compromise; that it is a matter for the discretion of the court; and that when, in the particular circumstances of the case, grave injustice would be done by allowing the compromise to stand, the compromise may be set aside, even although the limitation of Counsel’s authority was unknown to the other side, or where clear and unequivocal instructions of limitations have been given.”

I confess that I have given the above passage a most careful consideration and must fully and most respectfully endorse the same as the correct position of the present law. It is my view, therefore, that the court possesses the discretionary jurisdiction to examine the entire circumstances of a particular case, in order to determine whether or not the compromise entered into by Counsel should be sanctioned by the court. The remedy, being discretionary, must be exercised with the utmost care and with regard to the injustice or otherwise of allowing an order to stand. It is this jurisdiction that both courts below invoked and exercised in favour of the respondent as plaintiff in the originating summons.

The above position of the law has received judicial approval in a number of decided cases. So, in Neale v. Gordon Lennox (1902) A.C. 465, H. L.) or (1900-3) All P R. 622, the plaintiff in an action for libel authorised her Counsel to compromise on condition that all imputations on her character were publicly disclaimed in court. Her Counsel who did not make this limitation of his authority known to the defendant’s Counsel omitted in that compromise to extract the withdrawal of imputations on the plaintiff’s character as instructed. The House of Lords (England) in reversing the judgment of the Court of Appeal unanimously set aside the order as having been made in excess of authority and depriving the plaintiff of the opportunity of vindicating her character in public and the case was restored to the cause list for hearing. It may thus be said that where Counsel has authority from his client to agree to a reference upon certain conditions and he disregards such limitations and agrees to an order of reference unconditionally, the court has a discretion not to enforce such order against the wishes of the client although the limit put by the client on his Counsel’s authority is not made known to the other side when the reference is agreed upon. The court before whom the question of setting aside the reference comes is not bound to sanction an arrangement made by Counsel which is not, in the opinion of the court. a proper one.

Delivering the leading judgment of the House of Lords in Neale v. Gordon Lennox, (supra), the Earl of Halsbury, L.C. justifying the position of the court in the clearest possible language had this to say: –

“……. and to suggest to me that a court of justice is so far bound by the unauthorised act of learned Counsel that it is deprived of its general authority over justice between the parties is, to my mind, the most extraordinary proposition that I ever heard. That condition of things seems not to have been in the contemplation of the Court of Appeal. I will only say for myself that I should absolutely repudiate any such principle …”

A little later in his judgment the noble Lord, again in a rather strong language, added as follows:-

“…….. When two parties seek as part of their arrangement the intervention of a Court of justice to say that something shall or shall not be done, although one of the parties to it is clearly not consenting to it, but has in the most distinct form said that the consent to refer – to take it from the jurisdiction of the ordinary tribunal shall only be on certain terms, to say that any learned Counsel can so far contradict what his client has said, and act without the authority of his client as to bind the court itself, is a proposition which I certainly will never assent to””

Lord Macnaghten in endorsing the judgment of the noble Lord Chancellor succinctly explained the position as follows:

“I do not think that the court is entirely in the hands of Counsel, and bound to give the seal of its authority to any arrangement that Counsel may make when the arrangement itself is not in its opinion a proper one. In the next place, I do not think that any Counsel has authority to compel his client to refer an action which the client desires to try in open court”.

In the same case, Lord Brampton in a pungent contribution stated thus:-

“I have rarely heard anything more preposterous, to my mind, than the notion that a suitor can impose no effective veto upon a course proposed to be taken by his or her own Counsel which rightly or wrongly in his or her judgment will operate most prejudicially to his or her interests in an action, and possibly to the ruin of his or her character. I quite agree, therefore, that this appeal ought to be allowed and the case restored to the paper.”

There is finally the contribution of Lord Lindley in the same Neale case where he robbed in the same view of the law as follows:-

“Unfortunately, the plaintiff here wishing to get rid of the order drew it up with the view of getting it set aside, and in form this is an application, not to prevent the drawing up of the order, but to have it set aside; but that is mere form – mere machinery. It would be absolutely wrong, to my mind, for the court to allow that order to be acted on and to take effect the moment it is judicially ascertained and brought to its attention that it is an order which the court never would have dreamt of making if the court had known the facts. That view of the case seems to me to have been overlooked by the Court of Appeal, and to be fatal to the validity of the order”,

So, too, in Marsden v. Marsden (1972) Fam. 280 or (1972) 2 All E.R. 1162, Counsel had, contrary to the express instructions of his client consented to an agreement with Counsel for the defendant who was not aware of the limitation of the authority of the petitioner’s Counsel to compromise the divorce petition. The court held that the agreement could not stand in the circumstances of the case, the same having been entered into contrary to the express instructions of the petitioner. Turning to the circumstances in which the court should interfere to set aside an order based upon a compromise. Watkins, J. in Marsden v. Marsden, (Supra) stated thus:

“With regard to circumstances in which the court should interfere to set aside an order based on a compromise, I have been referred to a number of authorities. They all show that the court should view such applications as this with extreme caution and that a court will not grant such an application except in a case which calls clearly for interference with the order made. It is a discretionary remedy to be exercised with care and with regard to the injustice or otherwise of allowing an order to stand.”

I think, with respect, that the above represents the correct position of the present law on the subject. It therefore seems to me that the court has ample jurisdiction to interfere with or to set aside a judgment or order based on a compromise even though the limitation of the authority of Counsel was unknown to the other side. This jurisdiction being discretionary must be exercised judiciously and with extreme caution having regard to the injustice or otherwise of allowing an order to stand. I will now return to the question whether or not the two courts below were right to have exercised their discretion in favour of the respondent in all the circumstances of the case by setting aside the consent judgment in issue.

In this regard, it is necessary to point out that a consent judgment or order is as effective in law in respect of all the matters which are therein settled as any other judgment or order arrived at after the matters are fully fought out to the end. As Lord Herschel, L. C. explained in In Re South America and Mexican Company, Ex Parte Bank of England (1895) 1 Ch. 37 at 50:-

The truth is, a judgment by consent is intended to put a stop to litigation between the parties just as much as is a judgment which results from the decision of the court after the matter has been fought out to the end. And I think it would be very mischievous if one were not to give a fair and reasonable interpretation to such judgments, and were to allow questions that were really involved in the action to be fought over again in a subsequent action.”

Such, therefore, is the binding force of a consent judgment. Accordingly,no consent judgment or order has any operation or effect whether by way of estoppel or otherwise against any of the parties who is not shown to have consented to it; but as between consenting parties and their privies, a consent judgment or order is as effective in respect of the matters which are thus settled as any judgment given after the matters are fully fought out to the end. See Talabi v. Madam Adeseye (1972) 1 All NLR (Pt. 2) 255. A court judgment is either by consent in which case it must have been passed with the mutual consent of the parties whose blessing it must receive or else it is one passed by the court after the action has been contested and fought out to the end. The question is whether the consent judgment of Ofili, J. in question is truly a consent judgment or whether in all the circumstances of the case it was a nudum pactum and consequently liable to be set aside. I will, at the risk of repetition, turn to the facts of this case once again with a view to determining whether this is a proper case for intervention by the courts.

It is plain from the records that the following facts are hardly in dispute, namely:-

(i) The Counsel who acted for the respondent at the trial court when the compromise was struck had received very clear instructions from his client which expressly limited his authority to negotiate a settlement with the other side.

(ii) This limitation of the authority of the respondent’s Counsel to negotiate a settlement was not known to Counsel for the appellant.

(iii) For some undisclosed reason, the respondent’s Counsel purported to reach terms of settlement dated the 6th November, 1986 with the appellant’s Counsel which were unauthorised and at complete variance with his instructions.

(iv) That the unauthorised terms of the settlement were grossly detrimental to the interest of the respondent and would occasion grave injustice to the said respondent if the compromise is allowed to stand.

(v) The respondent, the moment it became aware of the purported compromise wrote letters dated the 18th December, 1986 to both its Counsel and Counsel to the appellant informing them that it did not recognise the validity of the compromise which was contrary to its instructions to Counsel.

(vi) On the 22nd December. 1986, Counsel to the appellant replied the respondent insisting on the validity of the disputed terms of settlement which it stressed, was accepted by the respondent’s Counsel.

(vii) On the 14th May, 1987 the respondent’s Counsel having been misled by the appellant’s Counsel that the terms of settlement had been filed in court by the appellant’s Counsel wrote to the Registrar of the trial court advising him in clear terms that his client, the respondent, had rejected the said terms of settlement.

(viii) By a letter dated the 25th May, 1987, the appellant’s Counsel insisted on the implementation of the purported settlement.

(ix) On the 27th July, 1987 the appellant’s Counsel without the prior consent of the respondent caused the disputed terms of settlement to be filed in court.

(x) On the same 27th July, 1987 the appellant’s Counsel moved the court in the absence of both the respondent and its Counsel for the entry of consent judgment in the case in terms of the disputed terms of settlement.

(xi) On the said 27th July, 1987 the appellant’s Counsel significantly failed to inform the court that there was a dispute as to the said terms of settlement.

(xii) The court did not also advert its mind to the letter of the 14th May, 1987 in which it was advised that the purported terms of settlement were in dispute and had been rejected by the respondent.

(xiii) That the trial court under the mistaken belief that the disputed terms of settlement represented the subsisting mutual agreement of both parties proceeded to enter consent judgment on the sale application of the appellant’s Counsel based on the said terms rejected by the respondent.

Now, upon a close study of the above facts, I ask myself whether it can reasonably be suggested with any degree of seriousness that the appellant and respondent were ad idem with regard to the terms of settlement in issue al the time Ofili, J. entered consent judgment in respect thereof. I also ask myself whether it can be said, again with any degree of seriousness, that the appellant’s Counsel acted bonafide when, at the height of the disagreement between the parties with regard to the purported terms of settlement, he went ahead unilaterally to file them in court and urged that the same be immediately entered by the court as consent judgment in the suit in the absence of both the respondent and its Counsel. I think not.

Another serious point of note is that it does not appear from the court records that the respondent and its Counsel were even served with any hearing notice against the court hearing of the 27th July 1987 on which date the appellant purportedly reported amicable settlement of the suit by the parties to the court. The suit was on the 5th February, 1986 adjourned sine die for an out of court settlement. Thereafter the case was not called up again until the 27th July, 1987. On that date both the appellant and its Counsel were present in court. The respondent and its Counsel were absent. There was no indication on record whether or not the latter were served with hearing notice in respect of the report of the alleged settlement. This state of affairs notwithstanding, the appellant’s Counsel still found himself able to report the purported out of court settlement of the suit unilaterally. He further proceeded to press for the alleged terms of settlement which to his knowledge were rejected by the respondent to be entered as consent judgment of the parties in the suit.

Perhaps, more seriously, is the fact that the learned appellant’s Counsel, whether deliberately or by inadvertence, failed to disclose to the trial court on the said 27th July, 1987 that the terms of settlement in issue were rejected by the respondent. Indeed, from the records, it does appear that the impression he, conveyed to the trial court on that date was that the said terms represented the mutual agreement of the parties. The minutes of the court proceedings of that date read inter alia as follows:-

“Mr. S. M. Ojikutu. for the respondent.

The Petitioner absent.

Mr. Ojikutu: The petitioner is not present in court, but I understand he has written a letter to this Court to confirm if the terms of settlement have been filed. We have just filed the terms of settlement, hereby tendered and marked Exhibit A. We humbly urge the court to enter judgment in accordance with the terms.”

The trial court, for its own part, consequently entered consent judgment in terms of the purported terms of settlement. It said:-

“Judgment

I have heard Mr. Ojikutu, for the respondents and I have examined and read Exhibit A which is a document embodying the terms of settlement between the petitioner and the respondent dated 6th day of November, 1986 and subscribed by the Chambers of Funso Alayande & Co. for the petitioner and Abdullahi Ibrahim & Co. for the respondent, and duly filed in Court on the 27th day of July, 1987. I am satisfied that the terms of settlement constitute the mutual agreement of the parties and I therefore enter judgment on terms of the settlement in Exhibit A.

No Order as to costs.”

It is plain to me that the trial court, if it had known the true and full facts surrounding the alleged terms of settlement, would never have described them as constituting the mutual agreement of the parties in the suit. In fact and in truth those terms were not the mutual agreement of both parties. On the contrary, they were terms which the parties violently disagreed upon from the onset and could hardly be described as terms mutually agreed upon by them.

Reverting once more to the question of fraud, it cannot be disputed that this, in most cases, involves dishonesty. It is however right to say that the courts do not appear to have ventured to lay down, as a general proposition of law, what constitutes such fraud that is capable of setting aside a consent judgment or order. See Lloyds Bank Ltd. v. Marcan (1973) 3 All E.R. 754 at 760 or (1973) 1 W.L.R. 1387 at 1392. Actual fraud takes either the form of a statement which is false or a suppression of what is true. The partial statement of fact and the withholding of essential qualifications may make that which is stated absolutely false and fix it under the head of suggestio falsi; See Peck v. Gurney (1873) L.R. 6 H.L 377 at 403; Aaron’s Reefs v. Twiss (1896) A.C. 273 at 287 H.L. It seems to me that whether or not dishonesty can be imputed to the general conduct of Counsel for the appellant in this matter, one serious act of misconduct stands out. This is the failure of Counsel for the appellant to disclose to the trial court that the terms of settlement he represented as the mutual agreement of the parties and on the basis of which the court was obliged to enter a consent judgment had been rejected and/or repudiated by the respondent on the ground of want of authority on the part of the respondent’s Counsel. I think this conduct must be regarded as unfortunate.

On the whole, it is clear to me that the compromise agreement was reached as a result of a grievous mistake, misrepresentation and/or misconception. The question of the non-disclosure of material facts to the court surrounding the compromise agreement on the date the disputed terms of settlement were entered as consent judgment was patently wrongful. It is also apparent that the trial court was misled into entering the consent judgment believing that the parties consented to its being given when, in point of fact, respondent did not. All these, in my view, are enough grounds to set aside the consent judgment in issue. I think it would amount to a serious act of injustice to the respondent to allow the same to stand.

Reference may be made finally to paragraph 12 of the affidavit of the respondent sworn to by one of its Directors on the 4th April 1988. This deposed as follows:-

“That contrary to the said limits of the Applicant’s instructions, Mr. Alayande exceeded the express instructions and introduced some clauses which were detrimental to the Applicant’s interest into the terms of settlement he entered into with the respondent. That a certified true copy of the terms of settlement as filed by the respondent’s Counsel is attached herewith and marked Exhibit 2.”

That paragraph of the affidavit was not controverted by the appellant in its counter affidavit of the 14th September, 1988 in reply to the said respondent’s affidavit. Only paragraphs 15, 17, 18 and 21 of the respondent’s affidavit were specifically denied. This, in effect would mean that the unauthorised terms in the purported settlement were, as deposed to, detrimental to the interest of the respondent. In such circumstance, it would be wrong to allow the consent judgment to stand. Issue 2 is accordingly resolved against the appellant.

In conclusion, I find no substance in this appeal and the same is hereby dismissed with costs to the respondent against the appellant which I assess and fix at N10,000.00.

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SC.67/1995