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[2014] ZASCA 104
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Motswai v Road Accident Fund (766/13) [2014] ZASCA 104; 2014 (6) SA 360 (SCA); [2014] 4 All SA 286 (SCA) (29 August 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 766/13
DATE:
29 AUGUST 2014
In the matter
between:
MUSEJIE VENNON
MOTSWAI
.........................................
APPELLANT
And
ROAD ACCIDENT
FUND
...................................................
RESPONDENT
Neutral citation:
Motswai v RAF (766/13)
[2014] ZASCA 104
(29 August 2014)
Coram: Cachalia,
Majiedt and Swain JJA and Dambuza and Gorven AJJA
Heard: 18 August
2014
Delivered: 29
August 2014
Summary: Finding
of fraud made against attorney without a proper hearing in open court
and without the facts – Judgment delivered
after informal
discussion between judge and legal representatives in chambers –
Irregular and unfair – Second judgment
failing to correct
prejudicial findings against attorneys – Adverse costs order
set aside.
ORDER
On
appeal from: Gauteng Local Division, Johannesburg (Satchwell J
sitting as court of first instance):
The
appeal succeeds and the following order is made:
‘
(i)
Para 1 of the order of the high court made on 30 April 2013 is set
aside;
(ii)
The defendant shall furnish the plaintiff with an undertaking as
envisaged in
s17(4)(a)
of the
Road Accident Fund Act 56 of 1996
for
80 per cent of the costs of the future accommodation of the plaintiff
in a hospital or nursing home, or treatment, or rendering
of services
or supplying of goods to him arising out of the injuries sustained by
him in the motor vehicle collision on 24 August
2008, after such
costs are proved to have been incurred;
(iii)
The defendant shall pay the plaintiff’s taxed costs on the
appropriate magistrates’ court scale, including the
costs
incurred for obtaining medico-legal reports from Dr Read and Mr
Moodie;
(iv)
It is recorded that the plaintiff, Mr Musejie Vennon Motswai, is not
personally liable for any costs, and that his attorneys,
Wim Krynauw
Inc, shall not claim the costs incurred for the hearing giving rise
to the second judgment, the application for leave
to appeal or the
appeal.’
JUDGMENT
Cachalia
JA (Majiedt, Swain JJA and Dambuza and Gorven AJJA concurring)
[1]
When Mr C Pottinger, an attorney, and Mr T Tshidada, an advocate,
both junior members of the profession, entered Justice Satchwell’s
chambers at the Gauteng Local Division to record a settlement
agreement on behalf of their clients on 13 November 2012, they must
have thought that this would be a routine exercise. For as far as
they were concerned this involved a simple personal injury claim
against the Road Accident Fund (the Fund), the type of case that is
frequently settled in the courts without the need for a trial.
[2]
They could not have anticipated that two years later, the senior
attorney, Mr Wim Krynauw, whose company Wim Krynauw Inc
had been
instructed to handle the claim on the plaintiff’s behalf, would
be in this court fighting to defend his professional
reputation and
personal integrity against a finding of fraud that the judge would
make against him in his absence and without having
heard his version
of the events. But this is what happened and in the main what this
appeal is about.
[3]
This appeal has two unusual features. The first is that although it
is against an order of the high court prohibiting the plaintiff’s
attorneys from recovering any fee or disbursement from the plaintiff
or the Fund, neither the plaintiff himself, who is cited as
the
appellant, nor the Fund, the respondent, has any interest in these
proceedings. The Fund has indicated that it abides the decision
of
the court, no doubt to avoid incurring further costs.
[4]
The aggrieved party and de facto appellant is the plaintiff’s
attorney against whom the punitive costs order was made.
However, as
I have mentioned, Mr Krynauw’s real interest is to reverse
the high court’s finding of fraud against
him: the adverse
costs order is of secondary importance. It follows that although the
appeal is against the costs order (because
an appeal lies against an
order and not the findings) this is not his main complaint.
[5]
The other uncommon feature of this appeal is that it concerns two
judgments of the high court, not one. The first was delivered
on 7
December 2012,
[1]
and the
second, which contains the impugned order, on 30 April 2013. It was
in the first judgment that the finding of fraud was
made and it is
this finding that formed the building block for the punitive costs
order that the court was to make against Mr Krynauw
in the
second judgment. So, in effect, the high court granted Mr Krynauw
leave to appeal to this court against both judgments.
[6]
The circumstances giving rise to the finding of fraud were also
unusual. The plaintiff, Mr Musejie Vennon Motswai, had instructed
his
attorneys, Wim Krynauw Inc, to institute a claim against the Fund for
damages following an injury to his right ankle in a motor
vehicle
collision on 24 August 2008. The particulars of claim (the
particulars) averred that he had suffered a fractured ankle
whereas
it transpired that he had a less serious soft tissue injury. Because
of this apparent discrepancy in the description of
the nature of his
injury in the particulars the court found that Mr Krynauw, who
signed the pleading, had fabricated the claim,
misrepresented facts
to the court and fraudulently set out to enrich himself and his firm
from the funds intended to compensate
road accident victims. His
behaviour, said the judge, was ‘legally untenable, iniquitous
and ethically unconscionable’.
[2]
[7]
These findings have potentially serious consequences for Mr Krynauw
and his company. They have been reported prominently in
the
commercial press, the law reports
[3]
and in at least one magazine widely distributed in the profession.
That Mr Krynauw’s personal reputation and that of
his
company have been tarnished by these findings is an understatement.
He faces disciplinary action from the Law Society and his
right to
continue practising is now under threat. For him and his company the
stakes could not be higher.
[8]
In order to understand the attack against these findings it is
necessary to set out the facts more comprehensively. These appear
from the affidavits of the plaintiff’s and the Fund’s
attorneys filed in response to an invitation from the judge in
the
first judgment for the parties’ legal representatives to make
submissions on their entitlement to recover fees and disbursements.
The affidavits were filed before the hearing preceding the second
judgment. The truthfulness of their contents was not in issue
then
and is not in issue in this appeal.
[9]
The parties came to court on 13 November 2012 after pleadings had
closed and pre-trial preparations had been completed. Ms Holland,
a
junior professional assistant in Mr Krynauw’s company,
represented the plaintiff and Mr Tshidada, the Fund. Ms Holland
had
prepared a undertaking, as envisaged in s 17(4)(a) of the Road
Accident Fund Act 56 of 1996 (the Act),
[4]
that the Fund would pay 80 per cent of the plaintiff’s damages
and also the cost of his future medical treatment. She included
the
undertaking in a draft order, which included a clause that the Fund
would be liable for the payment of costs on the high court
scale.
[10]
The Fund refused to settle the matter on the terms in the draft order
for two reasons. First, it held the view that it had
already made a
payment to the plaintiff for his injury. Secondly, it was only
prepared to accept liability for the costs incurred
on the
magistrates’ court scale, and not on the high court scale.
[11]
As a result of this difference in opinion Ms Holland instructed Mr
Pottinger, an attorney not associated with Mr Krynauw’s
company, to assist her in settling the matter.
[5]
He quickly realised that the payment to which the Fund was referring
was for an earlier injury in 2006, and not to the injury that
was the
subject of the present claim. He drew the Fund’s apparent
misunderstanding to its attention and thus persuaded Mr
Tshidada to
tender the undertaking on behalf of the Fund.
[12]
Mr Pottinger was also of the view that should the plaintiff need time
off work for physiotherapy, he may also have a claim
for future loss
of earnings. The parties decided to approach a judge in chambers to
obtain a prima facie view on this issue, which
they agreed would bind
them. They had also agreed that costs would be recoverable from the
Fund on the magistrates’ court
scale and not on the high court
scale, and assumed that they would so amend the order to reflect
their agreement once they were
given the judge’s view on future
loss of earnings. They proceeded to Justice Satchwell’s
chambers to obtain her view
on the plaintiff’s possible claim
for future loss of earnings and to make their agreement an order of
court. But the matter
took an unanticipated turn.
[13]
Mr Pottinger and Mr Tshidada commenced by asking the judge to make a
determination on the outstanding issue of the future loss
of income.
She considered it unnecessary for the plaintiff to be absent from
work for the physiotherapy, and communicated her view
to them. They
accepted her determination at which point Mr Pottinger completed a
blank space that was left in the draft order that
was to be filled in
once the final settlement had been reached. He handed one copy of the
order to Mr Tshidada and another to the
judge.
[14]
It recorded that the Fund would be liable for 80 per cent of the
plaintiff’s agreed or proved damages; that it would
furnish the
plaintiff with an undertaking for 80 per cent of the costs for future
medical treatment; and also that it would be
liable for the costs of
litigation, including the costs incurred for medico-legal reports.
Importantly, the parties omitted amending
the order to reflect their
earlier agreement for the Fund to be liable for costs incurred on the
magistrates’ court scale.
The order given to the judge
therefore mistakenly provided for costs to be on the high court
scale, an issue over which the judge
would later in her judgment,
without apprising herself of the true facts, direct her withering
criticism at the parties’
legal representatives.
[6]
[15]
After perusing the draft order it struck the judge as odd that no
provision was made for any capital payment to the plaintiff:
it
provided only for a settlement on the basis of the s 17(4)(a)
undertaking and costs. She began remonstrating with them and
forcefully communicated her belief that the litigation had been
initiated for the sole purpose of benefitting the attorneys and
expert witnesses and was an abuse of the system of road accident
compensation. The lawyers, as the judge was to acknowledge later
in
her judgment, were surprised and bewildered by this turn of
events.
[7]
[16]
The judge informed the two lawyers that she was taking the court file
and the settlement agreement to the Deputy Judge President
to discuss
the matter with him, and then departed leaving them outside her
chambers. The file contained the pleadings (summons,
particulars and
plea), a ‘merits bundle’ comprising various documents
that the plaintiff’s attorneys submitted
to the Fund on his
behalf (RAF Form 1, MMF Form 1, Power of Attorney, Medical Consent
Form, the plaintiff’s identity document,
Accident Report,
Hospital Record and Affidavit) and the medico-legal reports.
[17]
Justice Satchwell returned a short while later. She invited the legal
representatives back into her chambers. On this occasion
Ms Holland
joined her colleagues in the judge’s chambers. The judge began
by drawing their attention to the fact that the
hospital records
reflected a soft tissue injury and not a fracture as had been
pleaded. This, she said accusingly, was indicative
of dishonest
litigation for financial gain on the part of the plaintiff’s
attorneys.
[18]
Mr Pottinger responded to this accusation by explaining that the
plaintiff had been involved in two accidents, the first being
two
years before the one in question and that it was possible that this
had been overlooked when the particulars were drawn. He
also drew the
judge’s attention to the fact that the ‘#’ symbol,
which appeared on one of the hospital records,
was often used as an
abbreviation for a fracture, which could have caused the person who
compiled the pleadings to have mistakenly
believed that she was
dealing with a fracture instead of a soft tissue injury. Mr Pottinger
explained further that, as far as he
was aware, a contingency fee
agreement was in place which entitled the attorney of record to
charge only 25 per cent of the capital
value, or double the
attorney’s usual fee, whichever was the lesser. The effect of
this arrangement, he argued, was that
the attorneys had in fact not
made any financial gain.
[19]
Justice Satchwell was unconvinced by these submissions and indicated
that the Fund would continue to be liable for the plaintiff’s
fees and disbursements despite his not having received any capital
award. Further, she questioned how it had been possible for
the
plaintiff to have claimed R10 000 in past medical expenses and R200
000 for general damages for a non-serious injury. Mr Pottinger
responded that he was not responsible for drafting the particulars or
choosing the figures: he surmised that it was because it
is common
practice for attorneys to choose nominal amounts when drafting a
summons as this made it easier to abandon a head of
damage instead of
attempting to add a new head before trial.
[20]
Finally, the judge asked why summons was issued at all in the light
of the fact that it appeared from one of the documents
in the merits
bundle that the claim had been lodged with the Fund together with the
hospital records. Mr Pottinger justified the
summons by saying that
the fact that the plaintiff appeared to have suffered an orthopaedic
injury, which could possibly have had
an adverse effect on his
ability to earn an income, merited further investigation by the
attorneys. The judge’s retort was
that attorneys should do
their investigation before issuing summons, and not after.
[21]
The judge then summarily terminated the discussion by expressing her
view that the matter needed to be referred to the Law
Society and
that the taxpayer should not be burdened by the costs of the
litigation. She stated that she would reserve her judgment
and
excused the parties from her chambers, apparently without asking Mr
Tshidada whether he wished to make any submissions for
the Fund.
[22]
Justice Satchwell delivered a lengthy judgment three weeks later. She
had clearly given the matter some thought. The tone of
the judgment
is strident – almost evangelical. It contains a trenchant
critique of how claims against the Fund are dealt
with, and is
evidently aimed at correcting the perceived abuse of the road
accident compensation system by ‘predatory’
administrators, attorneys, advocates and medico-legal experts all of
whom she accuses of being ‘enriched’ to the detriment
of
accident victims and taxpayers. But, in making this observation, no
doubt because of her considerable experience with claims
against the
Fund, the learned judge made sweeping findings against the
professionals who rendered services in this case, including
the
plaintiff’s attorneys. She did so without conducting a proper
hearing in an open court and, as will become apparent,
without a
factual basis. In the process she overlooked a recent dictum by this
court that judges must be astute not to pontificate
or to be
judgmental about persons who have not been called upon to defend
themselves.
[8]
[23]
It appears from her judgment that the documents that were handed to
her in the court file revealed the following: About a year
after the
plaintiff had been injured in August 2008, his attorney, Mr Krynauw,
caused a third party claim form to be served on
the Fund claiming
R120 000 for ‘soft tissue injuries’ to his right ankle.
The claim was supported by a medical report
compiled by Dr Louw. A
year later a high court summons was issued claiming R390 000 –
more than three times the original
claim. The summons alleged that
the plaintiff had suffered severe bodily injuries, including a
fractured ankle. The damages claimed
included past and estimated
future medical expenses of R70 000, past and estimated future
diminished earning capacity of R120 000
and general damages amounting
to R200 000. In addition, costs were claimed.
[24]
From her analysis of the documents Justice Satchwell made the
following observations. The plaintiff consulted with his attorneys
for the first time on 27 August 2008, three days after the accident,
and authorised them to obtain his medical records from the
hospital.
The records showed that he had suffered no more than a swollen right
ankle. This was therefore not a ‘serious injury’
as
envisaged in the Act and its regulations – a fact that she
believed would have been known to the attorneys by 10 July
2009, when
Mr Krynauw submitted the claim form to the Fund with Dr Louw’s
report. The initial claim of R120 000, which was
submitted to the
Fund, was therefore, Justice Satchwell wrote, ‘known by the
claimant’s attorney to be unsupported
by the facts’.
[9]
[25]
Regarding the particulars that Mr Krynauw signed on 30 March
2010,
[10]
she observed that
they persist in claiming for the serious injury of a ‘fractured
right ankle’. She thus concludes:
‘
This
is a fabrication. This is an untruth. The hospital notes say exactly
the opposite – they record that an X-ray was done
and there
were no fractures.’
[11]
And
further:
‘
[The
attorney] knowingly prepared a court document containing untruths . .
. .’
[12]
[26]
The judge thus drew the inference that Mr Krynauw had committed fraud
from a reading of the court file containing the pleadings
and
documents – without any other evidence. It was also the basis
of the adverse findings against others mentioned in the
judgment.
[27]
The judge also found that none of the damages claimed in the summons
were justifiable. The undertaking for future medical expenses
under s
17 of the Act, she found, was an ‘irrelevance’ as it had
no practical consequences or benefit for the plaintiff.
[13]
She thus concluded that the appellant’s lawyers’ and
medico-legal fees and the costs were not justified and that they
had
been unjustifiably enriched at the taxpayer’s expense.
[14]
Further, she determined, the Fund’s administrators and
attorneys could not escape this ‘critique’, because they
had adopted a supine approach to the litigation and were therefore
also complicit in this deceit.
[15]
They too, she said, unnecessarily commissioned expert reports.
Moreover, said the judge, the Fund and its attorneys inexplicably
agreed to a draft order that costs were to be paid on a high court
scale when the outcome only justified costs on the magistrates’
court scale.
[16]
[28]
This course of reasoning inexorably led the judge to conclude that
neither the appellant’s attorneys nor the Fund’s
attorneys were entitled to any fees for this claim and that the costs
of the experts should be met by the attorneys de bonis propriis.
[17]
But having come to this conclusion the judge perplexingly postponed
making such an order, apparently to afford the attorneys an
opportunity to make submissions on this aspect.
[18]
And for this purpose they were ordered to produce copies of invoices
and fee statements for counsel and experts who were engaged
in this
matter.
[29]
The court then made an order providing for the Fund to be liable for
80 per cent of the plaintiff’s agreed or proven
damages and
that it furnish the undertaking in terms of s 17(4)(a) of the Act for
his future medical expenses an order of court.
This part of the order
is also puzzling because the judge had earlier found the undertaking
to be an ‘irrelevance’
having no value for the plaintiff.
Her order also postponed the determination of the attorneys’
fees and disbursements to
a later date and referred the judgment to
the Law Society of the Northern Provinces, the Bar Council and the
Health Professions
Council, amongst others, to investigate possible
professional misconduct on the part of the professionals against whom
adverse
findings had been made.
[30]
It is evident that the judgment was prepared on the basis of the
inferences the judge drew from the documents in the court
file and
the informal discussions with the parties’ legal
representatives in her chambers. No formal record was kept of the
discussion. In effect, the parties had to prepare for the hearing on
costs without any record. Further, they faced the difficulty
that
they could not ask the judge to undo her findings in the first
judgment because once the findings were made the issues that
gave
rise to them were res judicata.
[31]
Nonetheless, they persisted, hoping somehow to undo the findings, and
prepared affidavits placing the facts before the judge.
Mr Krynauw
and Mr Pottinger filed affidavits on behalf of the plaintiff, and Mr
Molongoana and Mr Sishi on behalf of the Fund.
[32]
Mr Krynauw’s affidavit sets out in detail the facts concerning
the four major findings made against him and his firm:
these were
that he signed the particulars of claim knowing that they were
untrue; that medico-legal reports were unjustifiably
procured; that
there was no serious injury and consequently no justifiable claim for
general damages; and finally that the litigation
should never have
been pursued, much less settled belatedly only on the day of the
trial.
[33]
Of the four findings Mr Krynauw’s main complaint –
understandably – is the first, that he knowingly drafted
particulars of claim that were untrue. In this regard he says that he
has no specific recollection of the circumstances under which
he
signed the document. However he confirms that a candidate attorney,
Ms Whittle, drafted the particulars and he signed it once
he was
satisfied that it contained all the necessary allegations to support
the cause of action. He did not check the hospital
records before
signing the document as this was a time consuming exercise. Whether
or not he ought to have examined the records
is not a matter that
arises in this appeal.
[34]
He surmises that Ms Whittle probably mistakenly pleaded a fractured
ankle because some of the hospital records referred to
a fractured
ankle while others referred to a soft tissue injury. Furthermore Ms
Whittle would also have seen the plaintiff’s
affidavit, which
stated that he had suffered a ‘broken ankle’. He thus
asserts that neither he nor Ms Whittle intended
to plead a more
serious injury than the one that the plaintiff actually suffered and
that the judge overlooked the likelihood of
a bona fide error arising
from the hospital records.
[35]
In regard to the procurement of medico-legal reports by the
plaintiff’s attorneys, Mr Krynauw says that the procedure
he
adopts is to obtain the reports after the close of pleadings and once
a trial date has been allocated. And even though they
endeavour to
obtain reports some months before the trial it is often practically
difficult to do so because examinations and assessments
have to be
booked far in advance.
[36]
Concerning the criticism that general damages ought not to have been
claimed because there was no serious injury as envisaged
in s 17 of
the Act, Mr Krynauw explains that when the RAF 1 form was
completed soon after the accident, there was a challenge
to the
constitutionality of this section in the high court. The applicants,
who included the Law Society, were seeking an order
that the
provision limiting general damages to serious injuries be declared
unconstitutional. The attorneys were advised to continue
claiming for
general damages until the outcome of the constitutional challenge was
known. Further, at the time the particulars
were signed on 30 March
2010, the matter had not been finalised. Therefore, says Mr Krynauw,
the judge’s criticism regarding
the inclusion of general
damages in the particulars was based on incorrect facts.
[37]
Regarding the belated settlement of the claim, Mr Krynauw says that
this was a matter largely out of his hands. The situation,
he says,
would have been different if he believed that the claim had no merit
and had so advised his client, which was not the
case here. Attorneys
acting for the Fund, he says, often experience difficulty obtaining
mandates to make settlement offers and
this is why such offers are
usually made on the morning of the trial, which also seems to have
happened in this case. He explains
further that the firm took the
following steps to settle the action:
(i)
In preparation for trial the plaintiff was consulted on 3 September
2012, four years after the accident, when he reiterated
that he had a
‘broken’ leg and was still experiencing pain;
(ii)
The plaintiff was then referred to an orthopaedic surgeon, Doctor
Read, to be examined. He gave his report in November 2012.
From the
report it was apparent that apart from needing some time off work to
undergo future medical treatment, he would not suffer
any loss of
earnings. It also became clear then, after the relevant
constitutional challenges had run their course, that there
would be
no realistic possibility of a claim for general damages succeeding;
(iii)
A RAF 4 form was also obtained from Dr Read to confirm that there was
no serious bodily impairment. This was a precautionary
measure
because it would have been irresponsible for any attorney not to have
had the claim investigated fully, especially in the
light of the
client’s repeated assertion that he had broken his ankle. The
plaintiff’s complaint regarding the impact
of his injury –
that he could not walk for more than two hours – was repeated
to the Fund’s orthopaedic surgeon,
Dr van Niekerk;
(iv)
When it became clear that there was no real dispute concerning the
impact of the injury, Ms Holland, who was managing the case
for the
firm at the time, wrote to the Fund on 7 November 2012 suggesting the
action be settled. She included a request that costs
be paid on the
high court scale;
(v)
The Fund did not respond to the proposal, and so Mr Krynauw
dispatched Ms Holland to attend to the settlement and finalisation
of
the matter at court;
(vi)
The main reason for the difficulty in reaching a settlement was the
Fund’s erroneous view that the plaintiff had already
been
compensated for that injury to his right ankle. The Fund therefore
refused to give the undertaking; and
(vii)
In these circumstances a decision was taken to instruct Mr Pottinger
from another firm to assist with the settlement. Mr Pottinger
reached
an agreement with the Fund. It included the agreement for costs to be
paid on the magistrates’ court scale. The details
of what
transpired during the settlement negotiations and in Justice
Satchwell’s chambers are contained in Mr Pottinger’s
affidavit.
[38]
In their affidavits the Fund’s attorneys confirm that the Fund
refused to tender the undertaking despite their advice
to the
contrary. This was because the plaintiff had previously been given an
undertaking for an accident he had had two years earlier.
The
plaintiff had also persisted with his claim for loss of earnings, as
appears from Mr Pottinger’s affidavit.
[39]
On the issue of the costs, they confirm Mr Pottinger’s
assertion that there was a prior agreement that costs would be
paid
on the magistrates’ court scale. Mr Molongoana, an associate of
the firm which represented the Fund, says that they
were not given an
opportunity to address the judge on this issue ‘and
unfortunately the matter escalated into other issues
that resulted
[in] this judgment’.
[40]
Mr Sishi, a director in the firm, also refutes the finding that they
were supine and bent on legal and expert enrichment. He
says that
after being instructed to defend the matter they took the following
steps, all of which were necessary to protect the
Fund’s
interests:
(i)
From 9 July 2012, they began securing medico-legal appointments to
assess the plaintiff’s injuries. It usually took between
three
and four months to secure such appointments;
(ii)
On 8 October 2012, after receiving a report from Dr van Niekerk, the
Fund was advised to furnish an undertaking, but not to
make any
tender in respect of loss of income or general damages;
(iii)
A further opinion was received on 25 October 2012 in which the Fund
was advised that the plaintiff would require time off
from work for
medical treatment;
(iv)
On 7 November 2012, a final quantum report was sent to the Fund; and
(v)
On 13 November 2012, the Fund said that no further undertaking would
be given. Mr Tshidada was then instructed to attend at
court on the
day of the trial.
[41]
Because of the serious findings that had been made against the
plaintiff’s attorneys, they secured the services of senior
counsel, Mr van der Walt, for the second hearing on costs. Mr Makopo
appeared for the Fund. The record of the argument on costs
is part of
the proceedings before this court. It reveals that Mr van der Walt
launched a spirited attack against Justice Satchwell’s
judgment. In a nutshell he submitted that she made findings against
several lawyers and medico-legal experts, including findings
of fraud
and dishonesty against Mr Krynauw, without hearing them or conducting
a proper hearing. And, he contended, the affidavits
filed after the
first judgment demonstrate that her factual conclusions were palpably
wrong. He repeated these submissions in this
court.
[42]
Mr Makopo’s submissions were also aimed at persuading the court
that the judge’s findings against the Fund’s
attorneys in
the first judgment were wrong and that there were no grounds to
disallow their fees or the disbursements that were
incurred in
securing the services of various medico-legal experts.
[43]
The tone of the second judgment, which the judge considered not
reportable, unlike the first, is considerably less strident,
but is
more noticeable for what it omits than for what it says. It records
Mr van der Walt’s submissions but then elides
any proper
consideration of his principal submission: that the findings against
Mr Krynauw were simply wrong, particularly in regard
to the finding
of fraud. And it rejects the criticism that incorrect factual
conclusions were drawn ‘based upon an incorrect
reading of the
documentation’, but without dealing with the content of the
affidavits. Justice Satchwell concludes that ‘nothing
before
me’ justifies the payment of fees to the attorneys or entitles
them to recover either the fees of Mr Pottinger, or
the disbursements
for the radiologists, orthopaedic surgeons, occupational therapists
or industrial psychologists. However, no
proper reason is given for
this conclusion.
[44]
The judge does not refer to her earlier findings against the Fund’s
attorneys. She concludes, however, that they are
entitled to all
their fees and costs but not the disbursements incurred for the
orthopaedic surgeon, occupational therapist and
industrial
psychologist. Her finding that the Fund’s attorneys are
entitled to their fees and some disbursements, implicitly
repudiates
her earlier findings against them
[19]
– in my view, correctly so.
[45]
I adverted earlier to the informal discussion in the judge’s
chambers before the first judgment was delivered. This was
irregular.
Once it became apparent from her perusal of the papers that there
were concerns regarding the propriety and management
of this claim,
the judge ought to have terminated the discussion immediately,
postponed the matter for a proper hearing in open
court and directed
the parties to file affidavits to address her problems. Instead, she
proceeded to ‘remonstrate’
with them. Mr Pottinger, who
was instructed on the morning of the trial to attend to making the
draft agreement an order of court,
was not prepared, and hardly in a
position to answer some of the judge’s questions regarding the
history of the litigation.
And it seems that Mr Tshidada, who was in
a similar position, was not even asked to address the judge on any of
her concerns. In
fact they were left ‘bewildered’. So,
apart from being irregular, the proceedings in the judge’s
chambers were
also unfair. The wide-ranging findings in the first
judgment against individuals who were not called upon to defend
themselves
cannot stand for this reason alone.
[20]
[46]
But apart from the irregularity and unfairness of the proceedings
before the first judgment, the judge’s reasoning is
wrong. She
drew inferences from the documents that were before her without
calling for any further evidence. In this regard our
courts have
stated emphatically that charges of fraud or other conduct that
carries serious consequences must be proved by the
‘clearest’
evidence or ‘clear and satisfactory’ evidence or ‘clear
and convincing’ evidence,
or some similar phrase.
[21]
In my view the documents before the judge raised questions regarding
the efficacy of the claim and the costs incurred in the litigation
to
date – no more. The judge was entitled – indeed obliged –
to investigate these questions and if necessary
to call for evidence.
But she was not entitled to draw conclusions that appeared obvious to
her only from the available documents.
As was said in the well-known
dictum of Megarry J in John v Rees:
[22]
‘
.
. . [E]verybody who has anything to do with the law well knows, the
path of the law is strewn with examples of open and shut cases
which,
somehow, were not; of unanswerable charges which, in the event, were
completely answered; of inexplicable conduct which
was fully
explained; of fixed and unalterable determinations that, by
discussion, suffered a change.’
[47]
The evidence that the parties subsequently adduced on affidavit
demonstrates conclusively that the inferences drawn by the
judge and
the conclusions she reached were wrong. Firstly, the finding that Mr
Krynauw signed the particulars that alleged a fractured
ankle when he
knew this was not true was conclusively refuted by his assertion that
he signed the particulars without examining
the hospital records; his
concern was primarily to ensure that a cause of action was properly
made out.
[48]
Secondly, even though the court was correct in its view that the
hospital records showed that the injury was not serious, the
evidence
that the person who drew the particulars, Ms Whittle, probably did
not read all the hospital records carefully cannot
be rejected as
false. It is apparent from at least two of the hospital records which
the court did not refer to that there were
indications of a fracture
to the right ankle. The hospital record refers to ‘# Rt foot’
which is indicative of a right
foot fracture. Furthermore, the
plaintiff himself complained of a broken ankle soon after the
accident and again a few months before
the trial. So the judge’s
conclusion that the drafter of the particulars knowingly made false
allegations in the document
is also not sustainable.
[49]
Mr Krynauw’s affidavit also explains how it came about that
general damages were claimed in the particulars despite there
not
having been a ‘serious injury’ as envisaged in s 17 of
the Act. He says that this was done because a dispute on
the
constitutionality of that provision was pending and attorneys were
advised to continue claiming for general damages until the
dispute
was finalised – a fact that the judge was also not aware of
when she criticised the inclusion of general damages
as part of the
claim. The judge fails to deal with Mr Krynauw’s explanation on
this aspect in her second judgment. In my
view it was prudent for the
attorneys to continue to claim for general damages while the legal
position remained uncertain.
[50]
Regarding the criticism that the judge levelled against the attorneys
for including claims for past hospital expenses, medical
expenses and
loss of earnings, it was submitted that nominal amounts were claimed
for these heads as this is the usual practice
when the actual quantum
has not been established at the time the summons was issued. I do not
think that there is anything inherently
objectionable with this
practice, especially because the full extent of the injuries and
their consequences had not been conclusively
established before
summons was issued.
[51]
The next aspect that merits attention is the judge’s finding
that there was no warrant for engaging the services of medico-legal
experts and that this was done solely to enrich the parties involved.
Mr Krynauw explains why the plaintiff was referred for further
assessment: the plaintiff complained that his leg was broken and he
was still in pain on 3 September 2012. He was then referred
to Dr
Read, an orthopaedic surgeon, and to Mr Moodie, an industrial
psychologist, to be assessed.
[52]
Mr Krynauw explains that it would have been unreasonable, and even
negligent, for Ms Holland not to have referred the plaintiff
for
further assessment. She was in no position to assess the injury
herself or to make the assessment regarding his future employability.
Once Dr Read’s report came to hand and the attorney had
realised that this was not a serious injury she immediately took
steps to contact her opponents to settle the matter. I find nothing
in the attorneys’ conduct that justifies the criticism
levelled
against them or the medico-legal experts. This is not a situation, as
the judge found without considering the facts, where
it was clear
from the time of the accident that the plaintiff had no claim.
[53]
Regarding the reasons why Mr Pottinger was instructed to attend to
the matter on the day of the trial, the affidavits show
that this
happened only after the Fund’s attorneys had informed Ms
Holland that an undertaking could not be given because
the plaintiff
had been paid R20 000 sometime earlier. Mr Pottinger was asked to
deal with this aspect and the issue of any possible
loss of earnings
on the day of the trial. He dealt with the problem efficiently and
commendably by ascertaining that the amount
had been paid in respect
of an earlier injury and he was thus able to persuade his counterpart
for the Fund to furnish the requested
undertaking. And the dispute
over future loss of earnings was placed before the judge for her view
instead of continuing with further
litigation.
[54]
Mr Pottinger also accepted the Fund’s view that costs should be
paid only on the magistrates’ court scale. The
judge’s
finding that there was no basis to justify fees on the high court
scale assumed erroneously that this is what the
parties had agreed,
because that is how it appeared in the draft order. Had she held a
proper hearing and given the parties the
opportunity to deal with all
the issues – including this one – the error would not
have been made. The judge made no
reference to this error in her
second judgment.
[55]
An issue that seemed to have troubled the judge considerably was the
agreement between the parties that the Fund would be liable
for 80
per cent of the plaintiff’s agreed or proven damages and that
it would furnish an undertaking in terms of s 17 of
the Act to
reimburse 80 per cent of his future medical expenses. She found it
‘astounding’ that the Fund could agree
to be liable for
damages when there were none. In addition, no compensation or medical
expenses would be paid to the plaintiff.
Simply put, the court found
there was no value in the undertaking and that its only purpose was
to enrich the lawyers involved
in the litigation.
[56]
The court’s reasoning implies that the plaintiff’s
attorneys should have advised the plaintiff to abandon the
undertaking once it became clear that there were no general damages
and minimal loss of earnings and that the undertaking would
have no
practical effect. But with respect, the judge could only have come to
this conclusion because she misunderstood the import
of the
undertaking. The effect of the undertaking is that the plaintiff is
entitled to 80 per cent of whatever he may pay for treatment
he may
receive, even if he chooses private health care. So, to put it at its
lowest, it is potentially of some value to the plaintiff
(and it is
part of the order of the main judgment). The issue received
considerable attention in the first judgment but is not
mentioned in
the second judgment, even though the issue was fully ventilated
during the hearing. In my view the criticism directed
at the
attorneys for securing the undertaking, and at the Fund for acceding
to their request, was misconceived.
[57]
For all these reasons I conclude that a grave injustice was done to
Mr Krynauw by the finding of fraud against him. The judge’s
criticism of Mr Krynauw’s colleagues, including Mr
Pottinger who dealt with this claim, was also unwarranted. There
is
thus no proper basis to deprive the plaintiff’s attorneys of
their costs.
[58]
The critical remarks directed at the Fund’s attorneys and
counsel in the first judgment – though partially ameliorated
in
the second – were also not warranted, nor was the censure of
the orthopaedic surgeons, occupational therapists and industrial
psychologists who were engaged by the parties. The purpose of this
judgment is to correct this injustice to Mr Krynauw and to provide
succour to the other persons who were prejudiced by the findings of
the high court.
[59]
Through the authority vested in the courts by s 165(1) of the
Constitution, judges wield tremendous power. Their findings often
have serious repercussions for the persons affected by them. They may
vindicate those who have been wronged but they may condemn
others.
Their judgments may destroy the livelihoods and reputations of those
against whom they are directed. It is therefore a
power that must be
exercised judicially and within the parameters prescribed by law. In
this case it required the judge to hold
a public hearing so that the
interested parties were given an opportunity to deal with the issues
fully, including allowing them
to make all the relevant facts
available to the court before the impugned findings were made against
them. The judge failed to
do so and in the process, did serious harm
to several parties.
[60]
In the result the appeal succeeds and the following order is made:
(i)
Para 1 of the order of the high court made on 30 April 2013 is set
aside;
(ii)
The defendant shall furnish the plaintiff with an undertaking as
envisaged in
s17(4)(a)
of the
Road Accident Fund Act 56 of 1996
for
80 per cent of the costs of the future accommodation of the plaintiff
in a hospital or nursing home, or treatment, or rendering
of services
or supplying of goods to him arising out of the injuries sustained by
him in the motor vehicle collision on 24 August
2008, after such
costs are proved to have been incurred;
(iii)
The defendant shall pay the plaintiff’s taxed costs on the
appropriate magistrates’ court scale, including the
costs
incurred for obtaining medico-legal reports from Dr Read and Mr
Moodie;
(iv)
It is recorded that the plaintiff, Mr Musejie Vennon Motswai, is not
personally liable for any costs, and that his attorneys,
Wim Krynauw
Inc, shall not claim the costs incurred for the hearing giving rise
to the second judgment, the application for leave
to appeal or the
appeal.
A
CACHALIA
JUDGE
OF APPEAL
APPEARANCES
For
Appellant: N van der Walt SC (with him M Coetzer)
Instructed
by:
Wim
Krynauw Incorporated, Johannesburg
Martins
Attorneys, Bloemfontein
For
Respondent: No attendance
Instructed
by:
Sishi
Incorporated, Johannesburg
[1]
Motswai
v Road Accident Fund
2013
(3) SA 8 (GSJ).
[2]
Motswa
i
above paras 34-36.
[3]
Ibid
fn 1 above.
[4]
‘
Liability
of Fund and agents
.
. .
(4)
Where a claim for compensation under subsection (1)-
(a)
includes a claim for the costs of the future
accommodation of any person in a hospital or nursing home or
treatment of or rendering
of a service or supplying of goods to him
or her, the Fund or an agent shall be entitled, after furnishing the
third party concerned
with an undertaking to that effect or a
competent court has directed the Fund or the agent to furnish such
undertaking, to compensate-
(i) the third party
in respect of the said costs after the costs have been incurred and
on proof thereof; or
(ii) the provider
of such service or treatment directly, notwithstanding
section 19
(c)
or
(d)
,
in
accordance with the tariff contemplated in subsection (4B) . . . .’
[5]
Mr
Pottinger is incorrectly referred to as Advocate Pottinger in
Justice Satchwell’s first judgment.
[6]
Motswai
above
para 89.
[7]
Motswai
above para 4.
[8]
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) para 19.
[9]
Motswai
above
paras 22-25.
[10]
The
date is mistakenly given as May 2010 at para 26 of the high court
judgment. The correct date is given in para 28 as 30 March
2010.
[11]
Motsawai
above
para 26.
[12]
Ibid
para 28.
[13]
Motswai
above
para 52.
[14]
Ibid
paras 54-77.
[15]
Ibid
para 78.
[16]
Ibid
para 89.
[17]
Ibid
para 90.
[18]
Ibid
para 91.
[19]
Motswai
above
paras 78-89.
[20]
Cf
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) para 19.
[21]
R
H Christie
The
Law of Contract in South Africa
5
ed at 295;
Gates
v Gates
1939
AD 150
at155;
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) para 27.
[22]
John
v Rees & others
;
Martin
& another v Davis & others
;
Rees
& another v John
[1969] 2 All ER 274
at 309.