Bankfield Farm Limited v Hart and MacFarlane as Trustees of the Harvest Trust [2009] NZCA 297 (13 July 2009)

Last Updated: 21 July 2009

IN THE COURT OF APPEAL OF NEW ZEALANDCA343/2008 [2009] NZCA 297

BETWEEN BANKFIELD FARM LIMITED
Appellant

AND RAYMOND LESLIE HART
STEPHEN JOHN MACFARLANE
AS TRUSTEES OF THE HARVEST TRUST
Respondents

Hearing: 18 May 2009

Court: Baragwanath, Hugh Williams and Winkelmann JJ

Counsel: G A Hair for Appellant
D R Forman for Respondents

Judgment: 13 July 2009 at 11.30 am.

JUDGMENT OF THE COURT

A The appeal is dismissed.

2. The appellant must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.
   

____________________________________________________________________

REASONS OF THE COURT

(Given by Hugh Williams J)

Introduction

[1] This appeal turns on whether a barrister, Mr Belcher, had authority to bind the appellant, Bankfield Farm Ltd (Bankfield), to a compromise of Court proceedings brought against it by the respondent trustees and in fact did so. Bankfield’s director, Mr Davey, denied Mr Belcher had such authority.
[2] In a reserved judgment delivered on 21 May 2008 French J entered summary judgment for the respondents, Messrs Hart and McFarlane as trustees of the Harvest Trust (Harvest Trust), for specific performance to compel the appellant to sell its farm property in the Esk Valley in South Canterbury to Harvest Trust on terms contained in an exchange of solicitors’ letters dated 18 July 2007. She also awarded costs to Harvest Trust.
[3] Bankfield appeals to this Court against that judgment.
[4] The terms and conditions of the order were varied by Fogarty J on 18 September 2008 so as to preserve ownership of the farm pending hearing this appeal and on an undertaking by mortgagees not to proceed with their threatened mortgagee sale until the appeal was concluded. That judgment is not under appeal and accordingly can be put to one side.

Facts

To mid-2007

[5] Only a brief sketch of the facts prior to about mid-2007 is necessary.
[6] Bankfield owned a 280 acre farm in Esk Valley, part of which was leased to Harvest Trust for five years from 31 August 2001 under a lease dated 5 October 2001. As found by the Judge, a dwelling was excepted from the lease and Harvest Trust had no right of occupation of the buildings on the property nor could it use about 10 acres of surrounding land. The lease, however, contained an option in the lessee’s favour to purchase the whole of the land for $960,000 plus GST payable by way of a deposit of $96,000 with the balance to be paid on possession date, set one month after exercise of the option. The option was to “remain open to be exercised until the date this lease comes to an end” and the lease said the option was to be exercised by “the lessee delivering to the lessor two copies of an agreement for sale and purchase” in the then current REINZ/ADLS form signed by the lessee or any nominee together with the deposit.
[7] Until his death on 13 November 2005, Bankfield’s sole director was a Mr Peter Gray. He was twice married, with two daughters, Ms Anderson and Ms Gray, born of the first.
[8] Shortly before his death, Mr Gray signed a will dated 28 October 2005 appointing his long-time friend, Mr Davey, sole executor and leaving his entire estate to the Peter Gray Trust. The Trust was constituted by deed dated 28 October 2005. Mr Davey and a solicitor, Mr Bradley, are now the trustees. Ms Anderson and Ms Gray are amongst the discretionary beneficiaries. The final beneficiary was said to be the Peter Gray Charitable Trust, but Mr Davey said that trust deed was unexecuted at Mr Gray’s death. That issue is not before us. By virtue of Mr Gray’s will, Mr Davey is now the sole director and shareholder of Bankfield, the latter in his capacity as trustee of the Peter Gray Trust.
[9] Significant litigation occurred after Mr Gray’s death. His daughters took proceedings against the estate under the Family Protection Act 1955. His first wife, whose entitlement to share in the residue of his estate under an agreement made under s 21 of the Property (Relationships) Act 1976 was protected by mortgage, endeavoured on several occasions to enforce that security by way of mortgagee sale. Both in Mr Gray’s last months and after his death, there was a dispute with Harvest Trust concerning rent, a seed-dressing plant and other issues.
[10] On 24 April 2006, Harvest Trust claimed to exercise the option in the lease. When Bankfield refused to settle, Harvest Trust issued proceedings for specific performance and general damages. Bankfield counterclaimed for, amongst other things, arrears of rent. It also asserted the option had been incorrectly exercised and pleaded what was said to be a difference in terms between the option in the lease and the manner of its exercise.
[11] It is pertinent to list the lawyers involved in that litigation:

• (a) Hope & Associates acted for the daughters in the Family Protection proceedings with Mr Belcher instructed by them.
• (b) Aspinall Joel (Ms Saunderson-Warner) acted for Harvest Trust until about October 2007 when its present solicitors, Raymond Sullivan McGlashan (Mr Forman) were instructed.
• (c) Rhodes & Co (Mr Rennie) acted for Bankfield until about March 2007. Mr Davey later instructed Thompson & Morgan (Mr Morgan).

June-July 2007

[12] Harvest Trust’s claim against Bankfield was allocated a fixture for 6 August 2007. In the run up to that fixture, all parties reviewed their positions concerning the litigation surrounding Mr Gray’s estate.
[13] Mr Davey said he changed solicitors from Rhodes & Co to Thompson & Morgan on 17 July 2007 but asserted Mr Morgan was only advising him personally and not as counsel for him in any of his representative capacities or for Bankfield.
[14] In fact, it appears Mr Davey may have instructed Mr Morgan earlier as, on 19 June 2007, Mr Morgan wrote to Hope & Associates saying he had been instructed to explore resolution of the various claims relating to Mr Gray’s estate and on 27 June 2007 Mr Morgan wrote twice to Mr Belcher sending copies of accounts and other material and querying whether Bankfield “should continue to resist the option”.
[15] At a meeting on 5 July 2007 it was agreed Mr Belcher would prepare a direction to be signed by the Gray Estate beneficiaries directing Mr Davey to explore the possibility of settlement with Harvest Trust. Mr Belcher was to act as Bankfield’s agent in those negotiations. It is unclear who attended the meeting but it certainly included Messrs Davey, Morgan and Bradley. Mr Gray’s daughters probably also attended.
[16] Between 9 and 12 July 2007 the “beneficiaries and statutory beneficiaries” under Mr Gray’s will circulated and signed a direction to Mr Davey as executor to “forthwith complete the sale of ... Bankfield Farm ... as per the option ... at the option price of $960,000 plus GST on condition that the sale ... operates as a full and final settlement” of Harvest Trust’s claim. The direction included retention of the net proceeds until such time as the Family Protection proceedings were settled.
[17] Ms Saunderson-Warner said Mr Belcher telephoned her on 17 July 2007 saying he had instructions from Bankfield to discuss settlement of the option proceedings, essentially on terms that the sale of the farm would proceed at the option price plus GST and with neither party having any continuing claim against the other, including for costs.
[18] Mr Belcher did not give evidence to the High Court, but the documentary trail shows that on 17 July 2007 Mr Davey signed the direction letter and also signed an instruction on the estate’s behalf to Thompson & Morgan:

... to proceed with negotiations with the parties and their legal advisers to reach settlement of ... the claim by Harvest Trust ... and in particular to confirm instructions for Hope & Associates and Andy Belcher in conjunction with Thompson & Morgan to negotiate a full settlement of the sale pursuant to an option to lease of the Bankfield farm having regard to the directions of the beneficiaries and Statutory Beneficiaries...

[19] On the same day Mr Morgan sent copies of the Beneficiaries’ Directions signed by Mr Davey to Mr Belcher and Hope & Associates so the latter could formally instruct the former. Mr Morgan suggested Mr Belcher might “in the meantime ... open exploratory discussions” with Harvest Trust and said Mr Davey’s wife was encouraging him to “seek finality in the Family Proceedings as well as the company issues”.
[20] We note Mr Davey claimed that at a meeting on 17 July he instructed Mr Morgan to pursue Bankfield’s claims for rent, storage and other matters and relied on a handwritten undated note by Mr Morgan covering some of those issues. Mr Davey also claimed that when the sale price was discussed at that meeting he said that he first wanted to know what Harvest Trust was offering for the farm. Mr Davey relied on those instructions and the note to found his assertion that Messrs Morgan and Belcher were not authorised to settle the option proceedings without reference back to him and without those other issues being taken into account.
[21] After receiving instructions to settle from her client, Harvest Trust, Ms Saunderson-Warner wrote to Mr Belcher on 18 July 2007 saying that, in settlement of all claims between the parties, Harvest Trust would settle the claim for $1.08m including GST and with the farm being transferred to it. She asked him to “confirm as a matter of urgency that Bankfield” would settle on those terms.
[22] Mr Belcher faxed a copy of that letter to Mr Morgan on 18 July with a draft response and the same day faxed Ms Saunderson-Warner saying he was “authorised by Bankfield ... to accept that offer” on the basis of a notice of discontinuance being signed and held on her undertaking to file it once funds had been paid and the farm transferred. His authority was confirmed in writing by Mr Morgan the following day and by Hope & Associates on 20 July.
[23] All that, Mr Davey asserted, was without his knowledge. He said Ms Saunderson-Warner’s offer was not referred to him at the time and as a result he refused to execute the transfer of the farm on Bankfield’s behalf. He wrote to Mr Morgan on 26 July purporting to revoke his letter of instruction in his capacity as executor of the Gray estate and “rescinding” his signature of the beneficiary direction sheet in that capacity.

After July 2007

[24] It remains to note that Ms Saunderson-Warner said copies of the various directions and authorities already referred to were voluntarily sent to her by Mr Belcher on or about 1 October 2007 with no reservations as to privilege. Mr Davey was critical of Mr Belcher in that regard.

Judgment under appeal

[25] In the judgment under appeal French J summarised the history to which we have referred, noting it was the exchange of correspondence on 18 July 2007 on which Harvest Trust relied as a binding settlement agreement and thus the basis for its application for summary judgment.
[26] After correctly reminding herself of the principles applying in summary judgment applications, she moved to discussing the defences raised by Bankfield.
[27] The first was that the documents sent by Mr Belcher to Ms Saunderson-Warner were inadmissible as privileged. The Judge held no arguable defence was raised in that regard. That was not pursued before us.
[28] She went on to hold that Messrs Belcher and Morgan had “express actual authority from [Bankfield] to negotiate a settlement agreement and that in writing as he did [to Ms Saunderson-Warner] on 18 July 2007 Mr Belcher was acting as [Bankfield’s] agent”: at [59].
[29] She then passed to the assertion that Mr Belcher exceeded his authority: he was only to negotiate, not to settle without Mr Davey’s approval, nor settle on the basis of abandoning Bankfield’s other claims.
[30] The Judge, however, held those assertions were contrary to Mr Davey’s written instructions to “reach” a settlement (at [18]) but held the issue did not need to be decided since any excess of actual authority was a matter between Bankfield and Mr Belcher and did not affect Harvest Trust’s position. She held that even if Messrs Belcher and Morgan did not have “actual authority to conclude an agreement on the terms they did it was certainly a situation of apparent or ostensible authority”.
[31] The Judge did not accept the suggestion that Mr Belcher’s letter of 18 July was a counter-offer, not an acceptance of settlement because of the existence of additional conditions such as the discontinuance. There was plainly an intention for the parties to be bound in the terms of the letters exchanged on 18 July 2007.
[32] The Judge also dismissed the claimed defence that the correspondence did not comply with the Contracts Enforcement Act 1956 – still in force in 2007 – because it omitted reference to a settlement date, was not signed by Mr Davey and did not sufficiently identify the land. The first of those had no substance as settlement within a reasonable time would be implied, the last was countermanded by the documents and, on the question of signature, the Judge held Mr Belcher was a person lawfully authorized under s 2 of the Act.

Submissions

Bankfield

[33] Mr Hair – who was not trial counsel for Bankfield – raised grounds of appeal concerning Mr Belcher’s actual or ostensible authority, the finding that he was lawfully authorised so s 2 of the Contracts Enforcement Act 1956 was complied with, and that Mr Belcher had authority to bind Bankfield.
[34] He argued it was plain French J made no finding Mr Belcher had actual authority because she said it was unnecessary for her to decide the issue. After careful analysis of the facts, Mr Hair submitted Mr Davey did not instruct Messrs Morgan or Belcher to enter into any settlement agreement. Their authority was solely to negotiate and did not extend to concluding a settlement contract without reference back to Mr Davey.
[35] Mr Hair distinguished between Mr Davey’s offices as sole executor, a trustee of the Gray Trust as beneficiary and as sole director of Bankfield. He submitted that Mr Davey’s execution of the 17 July letter and the Beneficiaries’ Directions were only on behalf of the estate and the Trust, not Bankfield. He accordingly submitted any authority which Mr Morgan and, more importantly, Mr Belcher had in the latter’s dealings with Ms Saunderson-Warner may have bound the estate and the trust but did not bind Bankfield. Any representation by Mr Belcher that he was authorized by Bankfield to negotiate a settlement did not amount to apparent or ostensible authority as it was derived only from his own representation. The claim this gave Mr Belcher authority was contrary to well-settled authority such as Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, at 503 (CA) per Diplock LJ, Armagas Ltd v Mundogas SA (The “Ocean Frost”) [1986] 1 AC 717 at 777 (HL) per Lord Keith and Savill v Chase Holdings (Wellington) Ltd [1989] 1 NZLR 257 at 305 (CA) per McMullin J. We note the point was pithily put by Browne-Wilkinson LJ in Egyptian International Foreign Trade Co v Soplex Wholesale Supplies Ltd and P S Refson & Co Ltd (The “Raffaella”) [1985] 2 Lloyds Rep 36 at 41 (CA):

It is important to bear in mind that the doctrine of holding out is a form of estoppel. As such, the starting point is that the principal must be shown to have made a representation, which the third party could and did reasonably rely on, that the agent had the necessary authority. The relevant enquiry, therefore, in all cases is whether the acts of the principal constitute a representation that the agent had a particular authority and were reasonably so understood by the third party. This requires the Court to consider the principal’s conduct as a whole.

[36] To similar effect, this Court observed in New Zealand Tenancy Bonds Ltd v Mooney [1986] 1 NZLR 280 at 284:

As Bowstead [on Agency (15ed, 1985)] goes on to emphasise (p 286) a representation by the agent that he has authority cannot create apparent authority unless the principal can be regarded as having in some way instigated or permitted it, or put the agent in a position where he appears to be authorised to make it. “No representation by the agent as to the extent of this authority can amount to a ‘holding out’ by the principal” (Attorney-General for Ceylon v A D Silva [1953] AC 461, 479; also Fay v Miller, Wilkins & Co [1941] Ch 360, 365 and Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 280, 505). It is of the essence of the doctrine that the principal has made a representation as to the extent of the agent’s authority. An agent cannot by simply asserting that his authority exceeds the limits laid down by the principal and notified to the contracting party create an apparent or ostensible authority wider than that.

[37] Mr Hair pointed to the fact there was no contact between Mr Belcher and Ms Saunderson-Warner before the former’s telephone call on 17 July. Mr Belcher had not been acting for Bankfield before that phone call. It was a “one off” transaction. That attracted the comment of Lord Keith in Armagas that a finding of ostensible authority in such circumstances “must be very rare and unusual”: at 777. The limits of Mr Belcher’s authority should have been known, he submitted, to Ms Saunderson-Warner in those circumstances and Ms Saunderson-Warner should have been put on enquiry and made investigations as to Mr Belcher’s authority before embarking on negotiations.
[38] Mr Hair also submitted Mr Belcher was acting in a conflict of interest situation given his role as counsel for Mr Gray’s daughters.
[39] On the Contracts Enforcement Act point, Mr Hair, whilst conceding Mr Belcher signed the fax of 18 July, submitted he had no authority to so sign. His position was analogous to that of counsel in New Lynn Borough v Auckland Bus Co Ltd [1964] NZLR 511 at 516 (HC).

Harvest Trust

[40] Mr Forman for Harvest Trust argued that Mr Belcher had actual authority to act for the company in the negotiations. That was derived from the company or from its solicitors who themselves had actual authority to instruct him to settle the option proceedings. He submitted Mr Belcher also had ostensible authority and had authority to execute the agreement for the purposes of the Contracts Enforcement Act.
[41] Mr Forman submitted that French J resolved the issue of actual authority. He pointed to findings concerning the extent of Mr Davey’s written instructions: at [61] and [62].
[42] Mr Forman submitted that Mr Davey’s instructions to Messrs Morgan and Belcher were on behalf of Bankfield, despite Mr Davey’s contrary assertion. His instructions were, after all, to them in relation to litigation in which Bankfield − but neither the estate nor the trust − was a party. He relied on the references to Bankfield in the Beneficiaries’ Directions which Mr Davey signed.
[43] In relation to ostensible authority, Mr Forman drew attention to authority that there are circumstances where an agent has power to make binding representations as to the extent of his or her authority or where the very appointment of the agent authorises the agent to make representations to the third party. He relied on the judgment of Pearson LJ in Freeman & Lockyer at 499:

An interesting passage, showing that the agent himself may make the representation which binds the company, is to be found in the judgment of Greer L.J. in ... British Thomson-Houston [Co Ltd v Federated European Bank Ltd [1896] 2 Ch 95, 104; [1932] 2 LB 176, 182] where he said:

In the case before us the guarantee was signed by a person who was the chairman of the board of directors. Someone must represent the company for the purpose of conducting correspondence, it may be a secretary, or the managing director, or some other officer; and he must have authority to bind the company by letters written on its behalf. The person chosen by the defendants for this purpose was the chairman of the board, and the defendants have represented by their chairman that the plaintiffs could rely on the guarantee of the defendants as the act of the defendants and are responsible for those acts which they have held him out as having authority to perform.

[44] Mr Forman submitted that a solicitor engaged in litigation has ostensible authority to compromise a claim unless any limitation of authority has been brought to the notice of the other side (Waugh v H B Clifford & Sons Ltd [1982] 1 Ch 374 at 387 (CA) per Brightman LJ) and that it was not essential that the solicitor involved should be the one on the record (Kontvanis v O’Brien (No 2) [1958] NZLR 516 at 517 (SC); appeal dismissed: Kontvanis v O’Brien (No 3) [1958] NZLR 1161 (CA)). That, he submitted, equally applied to barristers such as Mr Belcher.
[45] Mr Forman submitted the Contracts Enforcement Act point was decisively determined against Bankfield by the observations of Brightman LJ in Waugh at 389:

It is however said that there is authority that a solicitor does not have ostensible authority to sign a contract of sale or purchase of land on behalf of a client: H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694. ... Of course I agree that a solicitor in a non-contentious matter does not have such ostensible authority ...

Suppose that the plaintiff claims that a series of letters constitute a contract for the sale to him of a piece of land, and sues for specific performance, and that the defendant denies that the letters constitute a contract. Suppose that the matter is compromised on the basis of an offer by the vendor’s solicitor of a sale at a reduced price, and an acceptance of such offer by the purchaser’s solicitor. The defendant vendor could not assert against the plaintiff that the defendant’s solicitor did not have ostensible authority to make such compromise. The compromise would be binding on the defendant because it did not include “collateral matter”.

Discussion and Decision

[46] The first question is whether Mr Belcher, in his negotiations with Ms Saunderson-Warner, had actual authority on behalf of Bankfield.
[47] In our view, no conclusion is realistically open other than that he had such authority.
[48] Although Ms Saunderson-Warner was unaware of Mr Belcher’s involvement in the option proceedings prior to his telephone call to her on 17 July 2007 to discuss settlement, at that stage Mr Belcher had actual authority to act in the matter on Bankfield’s behalf.
[49] That most clearly arises from the handwritten instructions given Mr Morgan that day. Although it was headed “Peter Gray Estate”, the letter is plainly an instruction to “proceed with negotiations” and to “reach settlement” of the Harvest Trust claim. The instruction is also confirmation that Hope & Associates and Mr Belcher, in conjunction with Mr Morgan, were to “negotiate full settlement of the sale pursuant to an option” in the Bankfield lease. That instruction also directed Messrs Belcher and Morgan to have regard to the Beneficiaries’ Directions. The instructions must incontestably have been on Bankfield’s behalf since it was only the company – not the Trust or the estate – which was a party to the litigation.
[50] No more extensive instructions were required for Messrs Morgan and Belcher to have actual authority on Bankfield’s part to do exactly as the instructions required, namely to negotiate and settle the Harvest Trust claim against the company.
[51] The terms of the Beneficiaries’ Directions also support that view since they, too, required Mr Davey to complete the sale of the Bankfield farm to Harvest Trust under the option on condition that sale at that price would operate as a “full and final settlement” of Harvest Trust’s claim.
[52] Mr Davey – both then and now – clearly feels a heavy sense of responsibility to his late friend and is reluctant to do anything which might be construed as not endeavouring to honour his wishes. But if he required Messrs Morgan and Belcher to revert to him before concluding any agreement, it would have been simple for his 17 July instructions to have said as much. Further, although Mr Davey now raises issues of unpaid rent and other matters in support of his view no settlement agreement was concluded, the Beneficiaries’ Directions expressly required the settlement to be in accordance with the option and to terminate any claims for costs or damages between the parties. Accordingly, there is no basis to read down the amplitude of Mr Davey’s 17 July instructions as he now seeks to do.
[53] It is also pertinent to observe that Mr Davey’s account that he expressly limited the authority he gave Messrs Morgan and Belcher in the manner he claims is so contradicted by the documents – including the terms of his rescission letter of 26 July – that it must be held to command little credibility.
[54] Although it is therefore unnecessary to discuss implied and ostensible authority, we do so for completeness.
[55] The former is a form of actual authority; the latter a type of estoppel against the principal from denying authority
[56] In relation to implied and ostensible authority, we are further of the view that Mr Belcher’s approach to Ms Saunderson-Warner fell within each. In Waugh, Brightman LJ held at 387:

... the solicitor or 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. ...

It follows, in my view, that a solicitor (or counsel) may in a particular case have ostensible authority vis-à-vis his client. ... All that the opposing litigant need ask himself when testing the ostensible authority of the solicitor or counsel, is the question whether the compromise contains matter “collateral to the suit.”

[57] In Kontvanis, F B Adams J stated at 517-518:

From the point of view [of the defendant’s advisors], the compromise was negotiated and completed with an experienced solicitor acting for the plaintiff, and with no notice to them, or means of knowledge on their part, of any matters that might affect the authority of that solicitor to bind his client.

[Counsel for the defendant] contended, on the authority of 31 Halsbury’s Laws of England 2nd ed 107 and the cases there cited, that the facts so far stated were sufficient to decide the question in his favour on the grounds that Mr Bretherton, as the solicitor acting for the plaintiff in the proceedings, had ostensible authority to bind the plaintiff by a compromise. But the passage in Halsbury refers in terms to “a solicitor whose name is on the record”, and Mr Bretherton – the fifth of the series of solicitors whom the plaintiff had by then consulted – was not the solicitor on the record.

I incline to the view that, while the solicitor on the record necessarily has such ostensible authority in the absence of a communicated limitation of his authority, it is not essential, in order that a solicitor may possess such ostensible authority, that his name should actually be on the record.

...

I think it is clear that, except where the ostensible authority arises, a solicitor authorized to negotiate a settlement has only such special authority as may be conferred upon him for the purpose, and cannot bind his client except to the extent, if any, to which he is specifically authorized so to do. I do not find it necessary to decide the question.

[58] The reasoning in both cases was that the implied authority as between solicitor and client carried with it an “ostensible” authority as against the other party.
[59] Such authorities led the learned author of Foskett The Law and Practice of Compromise (6ed 2005) at [29.05] to say of implied authority that:

In this sense barristers and solicitors, according to the law as it stands, do possess certain implied powers to compromise on a client’s behalf even though not given express powers to do so.

[60] Seen in that light, Mr Belcher had not only express but implied authority to negotiate on Bankfield’s behalf and settle the claim against it by Harvest Trust on terms set out in the option, and to compromise all claims for costs and damages by either party against the other. His express or actual authority derived from Mr Davey’s instructions to Mr Morgan and Mr Morgan’s instructions to Mr Belcher. Ostensible authority, in accordance with Waugh and Kontvanis, derived from Mr Belcher’s implied authority as counsel to settle and Bankfield was accordingly bound by his actions and correspondence.
[61] We find it unnecessary to discuss ostensible authority. On the approach taken in Waugh and Kontvanis in the present case it would be a consequence of implied authority. We would prefer to reserve “ostensible” for the case where there is no actual authority – either express or implied – but because the principal has held out the agent as having authority, the principal is estopped from denying an authority which does not in fact exist.
[62] We endorse French J’s conclusions in her careful judgment on this part of the appeal.
[63] That finding also disposes of the argument based on the Contracts Enforcement Act. Mr Belcher’s signed fax accepting Ms Saunderson-Warner’s settlement offer was patently a memorandum or note of the contract and he was authorized to sign it on Bankfield’s behalf. Again, therefore, there is no basis to differ from French J’s conclusions in that regard.

Result

[64] In the result, Bankfield’s appeal is dismissed.
[65] Harvest Trust is entitled to costs for a standard appeal on a Band A basis together with usual disbursements.

Solicitors:
Malley & Co, Christchurch, for Appellant
Raymond Sullivan McGlashan, Timaru, for Respondents