Leymunlall Nandrame and others v Lomas Ramsaran

In civil litigation, a settlement freely reached by parties who are masters of their case should bring the proceedings to a binding conclusion. A court need not investigate the basis, fairness or negotiations behind agreed terms unless a special feature of the litigation requires inquiry or the parties invite it. Under Rule 45(1), a new trial requires a recognised ground such as fraud, violence or error, fresh evidence, or a genuine interests-of-justice justification. Regret, hindsight, an allegedly imperfect term, or a possible claim against a lawyer is insufficient. Withdrawal may or may not abandon the underlying claim, depending on the agreement. An agreement expressly abandoning claims remains binding, and estoppel by contract may arise even without a judgment embodying the settlement.

This appeal arose from longstanding neighbour litigation in Mauritius concerning a property boundary and alleged building encroachment. At the final trial, counsel announced agreed terms, including abandonment of the plaintiffs’ claims, maintenance of the existing boundary and construction, payment of Rs 75,000, and no order as to costs. The parties personally ratified the agreement and the claim was withdrawn. The plaintiffs later sought a new trial, alleging surprise, error, an inadequately defined boundary and excess of authority by their lawyers. The Supreme Court of Mauritius refused the application, holding that the open-court ratification bound the plaintiffs and that the delay was too long. The central issue before the Board was whether Rule 45(1) or the interests of justice justified reopening the settlement.

Disposition and governing principles

1. The appeal was dismissed. There was no basis for ordering a new trial.

2. Rule 45(1)(a) covers fraud, violence or error; rule 45(1)(b) concerns fresh evidence unavailable at trial; and rule 45(1)(c) provides a residual power where the interests of justice require a new trial. A settlement freely reached in open court requires a strong reason before it can be reopened. Regret, hindsight and the possibility that different terms might have been preferable are insufficient.

3. Unless a special feature of the litigation applies, parties are masters of their case and may settle at any time and on any terms. The judge is under no duty to investigate the basis of the settlement, the negotiations, the fairness of the terms or the precise boundary agreed, and ordinarily ought not to do so.

4. Any uncertainty about the exact location of the boundary did not negate the settlement. Properly construed, the agreement finally disposed of the principal claims: the demolition claim was abandoned and the damages claim was settled by payment of Rs 75,000. Rampersad v Boodhun (1957 MR 233) was distinguished because its settlement was conditional on judgment in another case, which was later struck out.

5. Withdrawal of proceedings does not invariably abandon the underlying claim. The question depends on the agreement and its context. Spicer v Tuli [2012] EWCA 845 was distinguishable because the withdrawal there preserved the intention to bring fresh proceedings. Here, the agreement expressly abandoned the claims.

6. It was unnecessary to decide whether the settlement also produced res judicata. The agreement in open court created estoppel by contract, or convention, whether or not there was also an estoppel by judgment.

7. The fact that the plaintiffs might have a claim against their lawyers for exceeding their instructions was separate from the question whether a new trial should be ordered. It did not justify reopening the settlement. Lord Hughes also stated, obiter, that counsel has ostensible authority to settle on behalf of a lay client and that the opposing party may rely on that authority: Waugh v HB Clifford & Sons Ltd [1982] 2 WLR 679; Harry v Ng Sing Kwong (1981) MR 457.

8. The Board did not need to decide the precise effect of the Civil Code. It noted that article 2044 defines a transaction bringing existing or contemplated litigation to an end, while articles 2052 and 2053 may have an effect similar to the common-law position by giving the transaction final authority between the parties and limiting challenges.

• Privy Council — In [2015] UKPC 20, the Board dismissed the appeal and upheld the refusal of a new trial.
• Supreme Court of Mauritius — Refused the plaintiffs’ application for a new trial, relying on their express ratification of the settlement in open court and the delay before challenging it.