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[2016] ZASCA 157
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Slabbert v MEC for Health and Social Development of Gauteng Provincial Government (432/2016) [2016] ZASCA 157 (3 October 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 432/2016
In
the matter between:
ELMARIE
SLABBERT APPELLANT
and
THE MEMBER OF THE
EXECUTIVE COUNCIL
FOR HEALTH AND SOCIAL
DEVELOPMENT OF
GAUTENG PROVINCIAL
GOVERNMENT RESPONDENT
Neutral
citation:
Slabbert v MEC for Health
and Social Development, Gauteng
(432/2016)
[2016] ZASCA 157
(3 October 2016)
Coram:
Mpati AP, Petse, Willis, Dambuza JJA
and Potterill AJA
Heard:
19 September 2016
Delivered:
3 October 2016
Summary
:
Civil procedure – Compromise agreement made an order of court –
Grounds for rescinding compromise are only fraud or
justus
error
provided the mistake (error) vitiated true consent and did not merely
relate to motive or to the merits of the dispute –
Or mistake
common to the parties – Court has no discretion to set aside
consent order if underlying compromise is not set
aside –
Compromise agreement and consent order not rescinded.
ORDER
On
appeal from:
Gauteng Division of the High Court, Pretoria
(Molopa-Sethosa J, sitting as court of first instance).
1. The appeal is upheld
with costs including the costs of two counsel.
2. The order of the court
a quo is set aside and substituted with the following order:
‘
The application
for rescission of the order made on 4 May 2015 is dismissed with
costs, including the costs of two counsel.’
JUDGMENT
Potterill
AJA (Mpati AP, Petse, Willis and Dambuza JJA concurring):
[1]
This is an expedited appeal against an order of the Gauteng Division
of the High Court, Pretoria (Molopa-Sethosa J) wherein
rescission and
the setting aside of a consent order was granted. The court also
mero
motu
ordered a rescission and the setting aside of the underlying
compromise agreement. The crux of the matter is whether the
rescission
and setting aside of the order and agreement are
appealable and were competent in terms of Uniform rule 42 and the
common law.
The appeal necessarily lies against both the rescission
of the court order and the setting aside of the compromise agreement.
The
appeal is with leave of the court a quo.
[2]
It is necessary to set out the facts leading up to the conclusion of
the compromise agreement and it being made an order of
court. The
appellant (plaintiff in the court a quo), Ms Elmarie Slabbert
(Slabbert) in her personal and representative capacity,
issued
summons, for payment of damages arising from injuries sustained
before, during and after her son’s birth on 10 May
2003. In the
particulars of claim it was averred that the medical staff of the
Edenvale and Johannesburg General Hospitals, employed
by the
respondent (defendant in the court a quo), the Member of the
Executive Council for Health and Social Development of the
Gauteng
provincial government (MEC), acted negligently resulting in her minor
son suffering global hypoxic ischemic epileptic encephalopathy
and
brain damage. This, in turn, resulted in her son suffering the
insult, dystonic athetoid quadriplegic cerebral palsy with
microcephaly and convulsions.
[3]
After the close of pleadings and pursuant to a pre-trial conference
on 7 July 2014, the parties agreed to separate the merits
from the
quantum. A further pre-trial conference was held on 21 April 2015 and
subsequent thereto the MEC’s counsel furnished
the respondent
with a memorandum on the issue of liability. Counsel for the MEC
thereafter received a written instruction from
the MEC to settle the
issue of liability. On 28 April 2015 the MEC’s counsel
approached Slabbert’s counsel and offered
the following
compromise: liability is compromised with the MEC undertaking to pay
90 per cent of Slabbert’s proved or agreed
damages in
Slabbert’s personal and representative capacities. The MEC’s
offer of compromise was accepted by Slabbert’s
attorney. The
MEC also consented to the costs of Slabbert’s four expert
witnesses and costs of senior and junior counsel.
In the rescission
application, the MEC chose not to set out any facts or the basis on
which they offered to compromise. Slabbert
had, at the time of the
application for rescission, called on the MEC to provide the
memorandum motivating why liability should
be conceded, but the MEC
refused to do so, relying on privilege. On 4 May 2015, counsel for
Slabbert and the MEC attended court
where the separation of quantum
and merits and the offer of compromise were made orders of court.
[4]
A pre-trial conference on the issue of quantum was held on 21 May
2015 with the pre-trial minute reflecting that that was the
only
issue left for determination. The MEC’s attorney requested
Professor Smuts, a Paediatric Neurologist, to provide the
MEC with a
medico-legal opinion and report for purposes of quantum. A further
pre-trial conference pertaining to quantum was held
on 30 March 2016
with the trial scheduled to proceed on 18 April 2016. On 13 April
2016, the MEC terminated the mandate of the
State Attorney and her
counsel. The record is silent on the reasons for this. The MEC then
appointed the current attorney and counsel.
[5]
On the morning on which the trial relating to quantum was to
commence, the MEC delivered an application seeking to rescind the
two
court orders. The one court order to be rescinded is not relevant to
this appeal, but the other was for rescission of the court
order in
terms of which the compromise agreement was made an order of court.
[6]
In the application for rescission the MEC relied on the report of
Prof Smuts which was alleged to contain new evidence that
had not
been available to her prior to the conclusion of the compromise
agreement. This report also disclosed that Prof Smuts had
treated the
minor child. Prof Smuts disclosed to Slabbert that the staff at the
hospitals did not cause the child’s condition.
She had not
disclosed this opinion to the MEC. Slabbert had also not disclosed
the report of her expert, Dr van Rensburg dated
29 Ocotber 2010
(first report). This report reflected a different opinion on the
basal ganglia to that contained in the expert
summary, a discrepancy
that required clarification through cross-examination.
[7]
An agreement of compromise creates new rights and obligations as a
substantive contract that exists independently from the original
cause.
[1]
The purpose of a
compromise is twofold: (a) to bring an end to existing litigation and
(b) to prevent or avoid litigation.
[2]
When a compromise is embodied in an order of court the order brings
finality to the
lis
between
the parties and it becomes
res
judicata
.
[3]
The court order changes the terms of a settlement agreement to an
enforceable court order – through execution or contempt
proceedings.
[4]
Thus, litigation
after the consent order will relate to non-compliance with the
consent order and not the underlying dispute.
[8]
This
being said, a
transactio
(compromise) is made by consent between parties and like any contract
or order of court made by consent, it may be set aside on
the ground
that it was fraudulently obtained. It may also be set aside on the
ground of
justus
error, ‘provided that such error vitiated true consent and did
not merely relate to motive or to the merits of a dispute
which it
was the very purpose of the parties to compromise.’
[5]
A
compromise agreement may also be set aside if the parties to the
agreement laboured under a common mistake.
[6]
However,
a unilateral mistake on the part of one party that does not flow from
a misrepresentation by the other does not allow for
the former party
to resile from a consent agreement.
[7]
The
question thus is whether one of these grounds exists for the MEC to
resile from the compromise agreement.
[9]
The court a quo accepted that there was new evidence that only came
to light after the compromise agreement had been concluded.
But for
the following reasons, this factual finding is incorrect. It is
common cause that prior to the compromise agreement Slabbert
had
served and filed four expert notices and summaries; the MEC had filed
none. Slabbert’s trial bundle with all the records
from which
these experts compiled their reports was in the possession of the
MEC, since it was at a hospital under her supervision,
prior to the
compromise agreement being concluded. It is unsettling that the
deponent to the founding affidavit can aver that there
was new
evidence proffered by Prof Smuts that the child suffered intrauterine
retardation. This fact was pertinently raised in
the expert summaries
of Dr Langenegger, a gynaecologist and obstetrician; Dr Johan Smith,
a neonatologist; and Dr van Rensburg,
a neuro-radiologist. It is
similarly untrue that the MEC was unaware of the fact that the
umbilical cord was tied twice around
the child’s neck. This was
set out in the particulars of claim and in the expert report of Prof
Viljoen. It is also unfounded
that the MEC was unaware that the child
was born microcephaly because it is set out in Dr van Rensburg’s
expert summary.
The summary notes that the involvement of the white
matter of the intrapartum suggested the presence of a prolonged
hypoxic injury
at an early gestational age, probably around the
beginning of the third trimester, and therefore before birth and
before labour.
He, nevertheless, persisted that despite this the
condition of the child was due to a hypoxic insult at full term when
a prior
priming injury was present. Similarly, Dr Langenegger
expressly recorded that at 34 weeks gestation, the intrauterine
growth retardation
was due to antenatal (prior to birth) neurological
damage. Despite this, he was of the opinion that as a result of the
failures
by medical staff of the MEC, the foetus was exposed to
partial prolonged hypoxia and acidosis. This evidence is not new, it
is
merely evidence which the MEC or her representatives did not
consider properly.
[10]
The court a quo was required to apply the
Plascon-Evans
rule
[8]
in accepting the version of Slabbert in so far as there was any
dispute of fact pertaining to the reduced foetal movements towards
the end of the pregnancy. Prof Smuts, in her report, recorded reduced
foetal movements towards the end of the pregnancy. She was
not in
possession of any of Slabbert’s experts’ summaries when
she compiled her report. There was no reference to reduced
foetal
movements towards the end of the pregnancy in the records or in the
summaries. Prof Smuts did not disclose from where she
derived this
information because she did not obtain it first-hand. The reason for
this was that she did not attend to Slabbert
during her pregnancy. In
answer to Prof Smuts’ averment, Slabbert stated under oath that
this statement by Prof Smuts is
factually incorrect as she detected
no decrease in foetal movements towards the end of the pregnancy. In
applying the
Plascon-Evans
rule, the version of Slabbert was to be accepted and the court a quo
incorrectly found that there was new evidence of reduced foetal
movements towards the end of the pregnancy.
[11]
In any event, Prof Smuts was at all material times in the joint
employ of the University of Pretoria and the MEC at the Pretoria
Hospital (now the Steve Biko Academic Hospital). When she treated the
child, it was in her capacity as a clinician at the hospital
and her
records were at all relevant times under the control of and available
to the MEC. The new argument raised by counsel for
the MEC that only
the records of Edenvale and Johannesburg hospitals were obtained as
being relevant to the cause of action and
that the MEC was unaware of
the records at the Pretoria Hospital is factually incorrect. Slabbert
discovered the records of Prof
Smuts at the Pretoria Hospital prior
to the compromise agreement being concluded. Even if Slabbert had not
discovered these records,
the MEC cannot rely on ignorance of its own
records which are under her control, merely because they were at
another hospital.
[12]
During the course of argument, the highwater mark for the MEC was the
non-disclosure by Slabbert of the first report by Dr
van Rensburg
prior to conclusion of the compromise agreement. This non-disclosure
rendered the opinion of Dr van Rensburg pertaining
to the basal
ganglia and the timing of the brain injury suspect. In his
supplementary affidavit he explained that when he compiled
the first
report he assumed that the minor child was born premature as he was
not given details of the course of Slabbert’s
pregnancy or the
child’s birth. He recorded that the basal ganglia show normal
volumes on the assumption that the child was
born prematurely. Dr
Lautenbach then almost immediately phoned him and informed him that
the child was a full term baby delivered
by C-section, that there
were signs of foetal distress and that after birth he required
resuscitation. Dr van Rensburg then reviewed
his magnetic resonance
imaging (MRI) films and concluded that the basal ganglia appeared
shrunken and smaller than expected for
a child born full term. He
accordingly removed the first report from the file and his database.
In February 2015 he was again
contacted by Dr Lautenbach who informed
him that there was evidence that the child had suffered from
hypoglycaemia after birth.
He then reviewed the MRI films and noticed
that the pulvinar on both sides showed distinct signal increase which
is an abnormality
associated with neonatal hypoglycaemia. He included
this in his report. This third report was what his expert summary was
based
on.
[13]
The irony is that Prof Smuts attached the first
report to her affidavit; it was thus in the possession of the MEC,
leaving no room
for fault to be attributed to Slabbert. But,
there was no duty on Slabbert to disclose this report; it was no
longer in the
possession of Dr van Rensburg and Slabbert did not rely
on it. She simply did not rely on it because the opinion came from an
incorrect
premise. The explanation proffered for the difference in
the first report and the expert summary pertaining to the basal
ganglia
is undisputed. The court a quo erred in not accepting this
undisputed version.
[14]
There was also no duty on Slabbert to disclose to the MEC that Prof
Smuts had expressed an opinion contrary to that expressed
by the
expert witnesses engaged by her. It was the MEC’s duty to
investigate the claim and obtain its own expert opinions.
Yet no
experts were consulted before the MEC made the offer of compromise
pertaining to the merits. The MEC was in possession of
all the
relevant clinical records for the merits in respect of which the
involvement of Prof Smuts had been disclosed. This fact
is obvious
because Prof Smuts was thereafter approached by the MEC’s
representatives for her historical records and reports
for purposes
of quantum. The MEC and her representative’s duty of care must
be exercised from the outset. That they did not
consult Prof Smuts
pertaining to merits, but only for purposes of quantum, is indicative
of the fact that they did not exercise
care in defending the claim,
or the representatives of the MEC made a mistake. If proper attention
had been given to the matter
the ‘new evidence’ would
have been seen for what it really was – evidence that had been
available – prior
to the conclusion of the compromise
agreement. This ‘new’ evidence was also thoroughly dealt
with by Slabbert’s
experts in coming to their conclusions.
[15]
The compromise agreement thus cannot be set aside on the basis of a
mutual error as there was no mutual error. The MEC cannot
rely on her
own mistake to avoid a contract which was in any event initiated by
her.
[9]
This unilateral mistake
accordingly did not amount to a
justus
error.
As stated by Christie:
[10]
‘
However material
the mistake, the mistaken party will not be able to escape from the
contract if his mistake was due to his own
fault. This principle will
apply whether his fault lies in not carrying out the reasonably
necessary investigations before committing
himself to the contract
that is, failing to do his homework’. (Footnote omitted.)
[16]
The court a quo was correct that a court cannot ignore facts placed
before it, but these facts must sustain one of the established
grounds on which a compromise agreement can be rescinded. Although a
High Court has inherent discretion, it can never exercise
it against
recognised principles of substantive law. Our constitutional
dispensation does not afford courts a carte blanche to
ignore
substantive law and grant orders couched as being in the ‘interests
of justice’. Moreover, certainty and finality
are key elements
of justice. Parties to a compromise agreement accept an element of
risk that their bargain might not be as advantageous
to them as
litigation might have been. This element of risk is inherent in the
very concept of compromise. It, however, does not
afford parties the
right to go back on the bargain for unilateral mistakes. Settlement
agreements have as their underlying foundation
the benefit of orderly
and effective administration of justice. Courts cannot allow for
consent orders to be set aside for reasons
not sanctioned by
applicable legal principles.
[17]
A court also does not have a discretion to set aside a consent order
where there are no grounds for setting aside the underlying
agreement
of compromise pursuant to which the consent order was made. In
Botha
this court found as follows (para 13):
‘
In
Theron NO v
United Democratic Front (Western Cape Region) & others
1984
(2) SA 532
(C) at 536G this court held that a court has a discretion
whether or not to grant an application for rescission under rule
42(1).
But where, as here, the court’s order recorded the terms
of a valid settlement agreement, there is no room for it to do so.’
(Footnote omitted.)
[18]
On behalf of the MEC it was argued that the orders granting
rescission were not appealable. The issue of the appealability
of the
order, irrespective of leave being granted by the court a quo, is a
preliminary issue in any appeal, but in the light of
the context of
this matter and my conclusion, it can conveniently be dealt with at
this late stage.
[19]
The rescission orders in form appear to be interlocutory and prima
facie not of final effect. On closer examination, the rescission
of
the compromise agreement is, however, final in substance and effect.
To determine whether an interim order is appealable regard
must be
had to the effect of the order rather than its mere appellation or
form.
[11]
In the words of
Harms AJA in
Zweni
v The Minister of Law and Order
1993 (1) SA 523
(A) at 531J-532A:
‘
The emphasis is
now rather on whether an appeal will necessarily lead to a more
expeditious and cost-effective final determination
of the main
dispute between parties and, as such, will decisively contribute to
its final solution.’
The
question of the appealability of an order where proceedings have not
been finally determined was discussed in
National Director of
Public Prosecutions v King
[2010] ZASCA 8
;
2010 (2) SACR 146
(SCA) where Nugent JA said the following (paras 50-51):
‘
There will be few
orders that significantly affect the rights of parties concerned that
will not be susceptible to correction by
a court of appeal. In
Liberty Life Assosciation of Africa Ltd v Niselow
(in another
court)
,
which was cited with approval by this court in
Beinash
v Wixley
[1997] ZASCA 32
;
1997 (3) SA 721
(SCA), I observed that, when the
question arises whether an order is appealable, what is most often
being asked is not whether
the order is capable of being corrected,
but rather whether it should be corrected in isolation and before the
proceedings have
run their full course. I said that two competing
principles come into play when the question is asked. On the one hand
justice
would seem to require that every decision of a lower court
should be capable not only of being corrected but of being corrected
forthwith and before it has consequences, while on the other hand the
delay and inconvenience that might result if every decision
is
subject to appeal as and when it is made might itself defeat the
attainment of justice.
. . . I pointed out in
Liberty Life
[
Association of Africa Ltd
v Niselow
(1996) 17
ILJ
673 (LAC)]
that while the classification of the order might at
one time have been considered to be determinative of whether it was
susceptible
to an appeal the approach that has been taken by the
courts in more recent times has been increasingly flexible and
pragmatic.
It has been directed more to doing what is appropriate in
the particular circumstances than to elevating the distinction,
between
orders that are appealable and those that are not, to one of
principle.’
[20]
In this matter the rescission orders will stand unless upset on
appeal. As these orders were wrongly granted, they should
be
corrected forthwith and before the orders have consequences. The
court a quo cannot change the consequences of the orders because
the
compromise agreement and consent order would have been laid to rest
by the rescission orders. If the orders are not set aside,
the
consequences will, in effect, be to send the parties to ventilate an
issue that has been lawfully settled by compromise in
a costly,
protracted trial. ‘A compromise once
lawfully
struck is very powerfully supported by the law, since nothing is more
salutary than the settlement of lawsuits’.
[12]
Accordingly, the rescission of the consent order must be set aside
because the court a quo did not have a discretion to set it
aside in
circumstances where there was no justification in law to set aside
the compromise agreement. It would, thus, in these
circumstances be
appropriate to adjudicate the appeal as the order being appealed
against has final effect.
[21]
The following order is made:
1. The appeal is upheld
with costs including the costs of two counsel.
2. The order of the court
a quo is set aside and substituted with the following order:
‘
The
application for rescission of the order made on 4 May 2015 is
dismissed with costs, including the costs of two counsel.’
________________
S Potterill
Acting Judge of Appeal
APPEARANCES:
For
the Appellant:
N G D Maritz SC (with him M M Lingerfelder)
Instructed
by:
Joseph’s Inc, Johannesburg
McIntyre
& van der Post, Bloemfontein
For
the Respondent:
V
Notshe SC (with him N Manaka)
Instructed
by:
Diale Mogashoa Attorneys, Pretoria
Honey
Attorneys, Bloemfontein
[1]
Road
Accident Fund v Ngubane
[2007] ZASCA 114
;
2008 (1) SA 432
(SCA) para 12.
[2]
Vena
v Port Elizabeth Divisional Council
1933 EDL 75
at 87.
[3]
Gollach
& Gomperts (1967) (Pty) Ltd v Universal Mills & Produce Co
(Pty) Ltd & others
1978 (1) SA 914
(A) at 922C.
[4]
Eke
v Parsons
[2015] ZACC 30
;
2016 (3) SA 37
(CC) para 31.
[5]
Gollach
(above) at 922H-923A.
[6]
Tshivhase
Royal Council & another v Tshivhase & another
[1992] ZASCA 185
;
1992 (4) SA 852
(A) at 863.
[7]
Botha
v Road Accident Fund
[2016] ZASCA 97
para 9.
[8]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634E-635D;
Thint
(Pty) Ltd v National Director of Public Prosecutions & others;
Zuma & another v National Director of Public Prosecutions
&
others
[2008]
ZACC 13
;
2009 (1) SA 1
;
2008 (2) SACR 421
(CC) para 8-10;
National
Director of Public Prosecutions v Zuma
[2009]
ZASCA 1
;
2009 (1) SACR 361
(SCA) para 26.
[9]
Botha
(above) para 11; and
Patcor
Quarries CC v Issroff and others
1998 (4) SA 1069
SECLD at 1085A-E.
[10]
R H Christie & G B Bradfield
Christie’s
the Law of Contract in South Africa
6 ed (2011) at 329-330. See also these authorities therein cited
Wiggins
v Colonial Government
(1899)
16 SC 425
at 429;
Acacia
Mines Ltd v Boshoff
1957 (1) SA 93
(T) at 101H-102B;
Diedericks
v Minister of Lands
1964 (1) SA 49
(N) at 57D-H;
Springvale
Ltd v Edwards
1969 (1) SA 464
(RA) 468 at 470H;
Osman
v Standard Bank National Credit Corpn Ltd
1985 (2) SA 378
(C) at 388F-I.
[11]
South
African Motor Industry Employer’s Association v South African
Bank of Athens Ltd
1980 (3) SA 91
(A) at 96H.
[12]
PL
v YL
2013 (6) SA 28
(ECG) (also reported
Ex
parte: PJLG & another; In re PJLG
[2013] 4 All SA 41
(ECG)) para 34 citing Ulric Huber
Jurisprudence
of My Time
3.15.15.
(Sir Percival Gane translation),
quoted with approval in
Eke
(above) para 22. (My emphasis.)