Minister of Police v Van der Watt and Another

On 3 March 2013, police were summoned to attend a domestic complaint where Mr Van der Watt was assaulting and threatening to kill his wife. In the presence of police, Mr Van der Watt continued threatening his wife, verbally abused police using offensive language, and assaulted police officers. Police handcuffed him and while going downstairs, he stumbled and rolled down, sustaining injuries. He was arrested and taken to police cells, then to hospital. Criminal charges were laid against Mr Van der Watt for assault and resisting arrest, but were later withdrawn after the prosecutor found no prospects of conviction. Mr Van der Watt subsequently instituted an action for damages against the Minister of Police for unlawful arrest, detention and assault. The Minister defended the action and the State Attorney advised on 13 February 2015 that they had "a case to fight for". However, on 22 October 2015, the trial date, the State Attorney (Ms Qongqo) and counsel (Mr Thabethe) settled the issue of liability at 50% against express instructions from Colonel Mahube to resist liability. The settlement was made an order of court by Ledwaba DJP. A second settlement on quantum was made an order by Louw J on 10 February 2017. The Minister then applied for rescission of both consent orders on the basis they were erroneously granted or resulted from justus error, arguing the State Attorney lacked authority to settle.

• Whether the State Attorney had ostensible/apparent authority to conclude settlement agreements on behalf of the Minister despite lacking actual authority and acting against express instructions
• Whether court orders based on settlement agreements concluded without actual authority are invalid and subject to rescission under Uniform Rule 42(1)(a)
• Whether the principle of justus error (just error) applies to set aside court orders made pursuant to settlement agreements concluded without actual authority
• Whether the settlement agreements and resulting court orders were tainted by illegality or fraud
• Whether augmentation of the quantum of damages claimed between the liability and quantum settlements rendered the court orders invalid

The appeal was dismissed with costs, including costs of two counsel. The Registrar was directed to send a copy of the judgment to the Minister of Justice and Correctional Services and the Legal Practice Council, drawing attention to paragraphs 30 and 31 regarding investigation of the conduct of the State Attorney (Ms Qongqo) and counsel (Mr Thabethe).

The binding legal principles established are: (1) A party who creates an impression that their legal representative has authority to act on their behalf will be bound by agreements concluded by that representative where the other party reasonably believed the representative had authority, was unaware of any limitation of authority, and acted without fraud - this is the doctrine of apparent or ostensible authority. (2) Uniform Rule 42(1)(a) permitting rescission of orders "erroneously sought or erroneously granted in the absence of any party affected thereby" is available only to parties who were absent when the order was granted, not to parties who were legally represented at the time. (3) Once a settlement agreement is made an order of court, it changes the status of rights and obligations between parties and renders the dispute res judicata. The court order remains valid and enforceable until set aside, and brings finality to the litigation. (4) The principle of justus error (just error) as a ground for rescission applies only to avoid the legal consequences of valid settlement agreements, not where a party contends that no valid settlement agreement existed due to lack of authority. (5) In the absence of fraud or illegality, court orders based on settlement agreements concluded by legal representatives with apparent authority will not be rescinded merely because the representatives lacked actual authority or acted against express instructions from their client.

The Court made important non-binding observations regarding professional conduct. In paragraphs 30-31, the Court expressed concern about how the State Attorney (Ms Qongqo) and counsel (Mr Thabethe) came to conclude settlement agreements in direct breach of express instructions from Colonel Mahube to resist the claim, particularly when all of the Minister's witnesses were present in court ready to testify on the trial date. The Court noted that "how it came about that the Minister's explicit instructions were not carried out and, in fact, defied is not clear from the record." The Court stated this was "a matter that warrants investigation both by the Minister of Justice and Correctional Services on the one hand and the Legal Practice Council on the other with a view to establish where things went wrong. And in particular whether any disciplinary action needs to be taken against Ms Qongqo and Mr Thabethe or both." This represents an unusual step by an appellate court to direct investigation of legal practitioners' conduct, reflecting serious concern about breach of professional duties to follow client instructions. The Court also distinguished the case from Kunene v Minister of Police, emphasizing that in Kunene there was fraud by the State Attorney and counsel, whereas in this case there was no suggestion of fraud - though there was clearly a breach of instructions that required investigation.

This case is significant in South African law for: (1) Clarifying the doctrine of apparent/ostensible authority in the context of State Attorneys settling litigation - that where a principal creates an impression that an agent has authority, and the other party reasonably relies on that appearance without knowledge of limitations and without fraud, the principal is bound by the agreement. (2) Confirming that Uniform Rule 42(1)(a) for rescission of orders "erroneously sought or granted" applies only where a party was absent when the order was made, not where the party was represented. (3) Reinforcing the principle that once settlement agreements become court orders, they achieve res judicata status and bring finality to disputes, changing the nature of rights and obligations from contractual to court-ordered. (4) Distinguishing between justus error as a basis for rescinding settlement agreements (applicable to valid agreements) versus arguments that no agreement existed due to lack of authority. (5) Establishing that augmentation of quantum under existing heads of damage does not constitute introduction of new causes of action that would invalidate settlement orders. (6) Demonstrating judicial oversight of professional conduct by directing investigation where legal representatives act against express client instructions. The judgment balances protection of good faith third parties against attempts by parties to escape settlement agreements based on internal authority limitations.