1. Action for damages for conspiracy to extort money via threats of criminal prosecution — subsequent withdrawal of allegations in consent orders in related proceedings. (Para 4 )
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1929 Supreme(SC) 30
Privy Council
Blanesburgh, Carson, Justice Viscount Sumner, JJ.
Charles Hubert Kinch -Appellant
Versus
Edward Keith Walcott and others -Resopndent
Privy Council Appeal No. 48 of 1928
Decided On : 19-03-1929
Advocates Appeared:
Minet May and Co., Markby Stewart and Wadesons, G.R.B. White, C.J.W. Farwell, S.P.J. Merlin, D.N. Pritt
Minet May and Co., Markby Stewart and Wadesons, G.R.B. White, C.J.W. Farwell, S.P.J. Merlin, D.N. Pritt
A consent order is as binding as a court order and must be set aside in a proper proceeding before a party can disregard its terms or raise allegations previously withdrawn under it, especially when such orders are interdependent.
Headnote:(A) Consent Orders - Effect and Set-aside - A consent order, once completed, is as effective as an order of the Court made otherwise than by consent and must be obeyed unless and until it is discharged by mutual agreement or set aside in proceedings duly constituted for that purpose.
(B) Estoppel - Preclusion of withdrawn allegations - A party who, by way of a consent order, withdraws allegations of fraud, malpractice, and duress is precluded from raising those same allegations in subsequent proceedings against the parties to that order, provided the order remains in force.
(C) Voidable Orders - Distinction between nullity and voidability - An order embodying an agreement that may be voidable at the instance of a party is not a nullity; it stands as an effective order until it has been effectively set aside in an action or proceeding directed to that special end.
(D) Interdependent Settlements - Where multiple consent orders are interdependent and intended to stand or fall together, a party cannot repudiate one while maintaining the advantages obtained under the other without a proceeding involving all necessary parties.
Facts of the case:
An agent entered into a settlement deed and mortgage to resolve a suit for accounts brought by a company. The agent later alleged that the settlement was obtained through duress and threats of criminal prosecution. Following a libel action and a rescission suit, consent orders were entered in both. In these orders, the agent unreservedly withdrew all charges of fraud, malpractice, and duress against the legal advisers involved. The agent subsequently initiated a new action for conspiracy to extort, repeating the allegations previously withdrawn. The respondents pleaded estoppel based on the consent orders. The agent argued the orders were obtained by the fraudulent concealment of an intent to prosecute him for perjury.
Findings of Court:
The consent order in the libel action remains effective and prevents the appellant from setting up the charges previously withdrawn. The order is not a nullity; at most, it is voidable, but it must be set aside in a specific proceeding before it can be disregarded. Additionally, because the consent orders in the libel and rescission suits were interdependent, the appellant could not repudiate one while retaining the benefits of the other.
Issues: Whether a party is estopped from raising allegations of fraud and duress in a new action after withdrawing them in a consent order, and whether such an order is rendered a nullity by the non-disclosure of a party's intent to initiate a separate prosecution.
Ratio Decidendi: A consent order is as binding as a judicial order and remains effective unless discharged by mutual agreement or set aside by the court in a proceeding specifically directed to that end. A party cannot unilaterally treat a voidable consent order as a nullity to bypass estoppel in a separate action, particularly when the order is linked to other settlements from which the party has derived benefit.
Result: Appeal dismissed.
Legal Category Hierarchy
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tort
-
conspiracy
- extortion
- libel
-
conspiracy
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practice and procedure
-
civil procedure
- consent orders
- estoppel
- preliminary issues
-
civil procedure
Table of Contents
Lord Blanesburgh:-
Before proceeding to define with particularity the issue which on this appeal their Lordships must determine, it may be well for clearness sake to set forth, as succinctly as possible, the somewhat involved story which leads up to it. All the parties live in Barbados. The appellant is a merchant there : the respondent Walcott a barrister-at-law, and the respondent Hutchinson a solicitor, both practising in the island. The respondent Taylor is a commercial agent who was for some time in the employment of the appellant.
For many years prior to 1925 the appellant had acted as agent on commission for a Newfoundland firm of Monroe and Company, and in later years for that firm's successors-in-business, the Monroe Export Company, Ltd. The appellant's agency was concerned mainly with the sale on commission of fish consigned by the Monroes to him in Barbados, and with the purchase in the island, also on commission, of molasses on their account.
In 1925 disputes arose between the Monroe Company and appellant with reference to his transactions, and in March 1925, the Company instituted against him in the Barbados Chancery Court a suit claiming full accounts on allegations, inter alia, that profits had been improperly withheld from the Company in connexion with his purchase of molasses, and that the appellant was suppressing his books in which his transactions on behalf of the Company were recorded. In that suit, to be referred to as the suit for accounts, respondent Walcott acted as counsel, and the respondent Hutchinson as solicitor for the Company, the appellant being duly represented by counsel and solicitors of his own. In the result on 5th June 1925, after a long trial, a decree in the suit adverse to the appellant was pronounced by the Acting Vice-Chancellor, who directed the accounts of the appellant's transactions to be reopened and ordered him to make payment together with the costs of suit of the amount found due on these reopened accounts when taken. A stay of execution was, however, upon terms granted to enable the appellant, if so advised to appeal.
Thereupon, indeed, within a few days, negotiations were on foot for a settlement. These were conducted by the respondents Walcott and Hutchinson on behalf of the Company with the appellant direct, that is to say, without the intervention of any legal advisers on his behalf. As a result of them a deed prepared by the respondent Hutchinson was on 18th June 1925, executed by the appellant. It bore that he had settled the Company's claims against him on all accounts by a payment in British currency of $15,000 thereby acknowledged to have been received, and by a mortgage thereby made of specified properties of his own to secure an additional sum the equivalent of $25,000 with interest. All further proceedings in the suit for accounts were to be discontinued.
This deed contained recitals which apparently the respondent Hutchinson now agrees were not in complete accord even with his own intent at the time and were less favourable to the appellant than they should have been. But the complaints of the appellant with reference to the transaction went far beyond any such matters of detail and as ventilated by him in correspondence and in legal proceedings to which reference must later be made were that he was left to act in the matter without legal advice ; that so far as the deed was a mortgage deed he executed it without understanding and indeed being misinformed as to its nature and that his execution of a deed at all was in effect the result of the pressure of the respondents Walcott and Hutchinson who threatened that, if he did not pay the $15,000 and execute the deed as presented to him, criminal proceedings would be taken for alleged misdeeds in relation to his purchases of molasses as agent for the Company.
Nor did the appellant keep to himself these charges of his against these respondents. In two letters, one of 2nd August 1925, and the other of 19th August 1925, addr
