Brief Summary

Settlement Agreement — Set aside — Plaintiff's claim for general damages and future loss of income based on misleading projections — Plaintiff's legal representatives failed to recognize that the plaintiff did not qualify for claims under section 17 of the Road Accident Fund Act — Settlement agreement set aside due to invalidity arising from improper qualifications for claims — Application for leave to appeal dismissed.

Comprehensive Summary

Summary of Judgment

1. Introduction

This judgment concerns an application for leave to appeal brought in the High Court of South Africa, Gauteng Division, Pretoria. The application was directed against the whole of a prior judgment and order delivered by the same court on 1 August 2022, in which the court refused to make a settlement agreement an order of court and found the settlement to be invalid/improper on the basis of the evidence before it.

The parties were Ubisi, M K (the plaintiff in the underlying Road Accident Fund claim and the applicant for leave to appeal) and the Road Accident Fund (the defendant in the action and the respondent in the leave application).

Procedurally, the underlying action arose from a motor vehicle collision and proceeded to trial. On 5 June 2019, the court ordered a separation of merits and quantum in terms of Uniform Rule 33(4). The merits were determined 100% in favour of the plaintiff, and the remaining heads of damages were postponed sine die. Thereafter, the parties concluded a settlement (recorded in an offer dated 25 November 2021) which the plaintiff sought to have made an order of court. The court declined to do so in the 1 August 2022 judgment, and this application sought leave to appeal that refusal and the associated findings.

The general subject-matter of the dispute concerned the court’s supervisory role over settlement agreements in Road Accident Fund litigation, especially where settlement terms (notably general damages and future loss of earnings) appear inconsistent with the evidence, and the applicable threshold requirements for general damages under the Road Accident Fund statutory framework. The judgment also addressed the statutory threshold for granting leave to appeal under the Superior Courts Act 10 of 2013 and the proposition that settlement does not necessarily deprive a court of jurisdiction.

2. Material Facts

The collision occurred on 5 September 2015 on the R510 near Northam, Rustenburg. The plaintiff, aged 36 at the time, was driving when another vehicle (the “insured” vehicle) entered his lane while overtaking and collided with him. The merits were later determined in the plaintiff’s favour at 100%.

The plaintiff sustained a fracture of the femur. He was hospitalised and treated, including insertion of fixation at the fracture site, and he spent a combined period of about six months in hospital and recuperating at home. These core injury facts were not treated as materially disputed in this judgment.

At the time of the accident, the plaintiff held a mining degree and worked as an underground mining supervisor. Upon returning to work, he was moved from underground duties to a position allowing him to work on the surface, due to reported difficulties performing tasks involving long walking hours and uneven terrain.

In preparation for quantum, the plaintiff was examined by multiple experts and an actuary. The plaintiff’s experts’ reports were supported by affidavits and, by agreement, those affidavits constituted evidence. The defendant obtained expert reports (orthopaedic surgeon and occupational therapist), but these were not supported by affidavits, and the judgment records that the defendant’s defence had been struck out when the matter was heard, with the result that the plaintiff’s expert evidence was uncontested before the court.

Two medico-legal assessments relevant to the plaintiff’s whole person impairment (WPI) were emphasised. In 2019, the plaintiff was reported as having a united femoral fracture with no residual complications and a WPI of 6%; in 2021, the WPI was assessed at 12%. The court treated it as significant that these WPI assessments were below the 30% threshold referred to in relation to section 17(1) for general damages, and that the plaintiff nevertheless sought to be qualified for general damages by reference to the Narrative Test.

Central to the court’s factual evaluation was the plaintiff’s industrial psychologist (IP) report (dated 21 October 2019), which included collateral information from the plaintiff’s employer. The report recorded that the plaintiff had progressed in 2017 from Underground Mine Supervisor to Section Manager. It further recorded information from the Mine Manager, Mr Van den Berg, to the effect that the plaintiff was performing well, seemed to have recovered with no negative effects from the injuries, and had the potential to progress further to Production Manager within about 3 to 5 years, based on his ability and qualifications, subject to additional experience. The court regarded this collateral information as contradicting adverse predictions that the plaintiff’s competitiveness and employability would be compromised in the open labour market.

Notwithstanding this evidence, an offer dated 25 November 2021 was made on behalf of the RAF and accepted, proposing settlement in the amounts of R500 000.00 for general damages and R2 049 830.20 for loss of earnings, together with a section 17(4) undertaking and costs on the High Court scale. The court refused to make that settlement an order, finding that its terms (especially general damages and future loss of earnings) were not supported by the collateral evidence and that the IP’s projection (as presented in support of the settlement) was misleading in light of the recorded career progression and future prospects.

The judgment also noted an omission in the court’s prior order in that it did not reflect that the plaintiff was entitled to payment of proven past loss of earnings, and the court expressed the view that this could potentially be cured by an amendment under Uniform Rule 42 once the exact amount was disclosed, to avoid the expense of an appeal on that limited issue.

3. Legal Issues

The application required the court to determine whether leave to appeal should be granted under sections 16 and 17 of the Superior Courts Act 10 of 2013 and Uniform Rule 49(1)(b). The central legal question was whether the applicant had demonstrated reasonable prospects of success on appeal, or some other statutory basis for leave, against the court’s refusal to endorse the settlement agreement and its associated findings.

A further issue, arising from the applicant’s stated grounds, was whether a settlement agreement concluded between the parties ends the lis and thereby deprives the court of jurisdiction, such that the court allegedly has no role other than to “endorse” the settlement when asked to make it an order of court.

The dispute primarily concerned the application of law to facts and the exercise of the court’s evaluative supervisory function. It implicated value-laden considerations associated with judicial oversight of settlements involving public funds (the RAF), including whether the settlement’s material terms were consistent with the evidence and lawful requirements, and whether judicial intervention was warranted to prevent abuse of process.

4. Court’s Reasoning

The court approached the application from the premise that the applicant’s grounds of appeal rested on a misconception: that once parties settle, the court must necessarily make the settlement an order and lacks further jurisdiction. The court rejected that premise by reference to authority holding that a settlement does not, by itself, deprive a court of jurisdiction, particularly when the court is expressly being asked—within the same action—to make the agreement an order of court.

In developing this point, the court relied on the reasoning in Patronacia Maswanganyi obo Teboho Machimane v Road Accident Fund. That case was used to illustrate the inconsistency in asserting that the court has no jurisdiction while simultaneously seeking an order from that court to embody the settlement. The court treated this as confirming that jurisdiction remains intact and that the court retains oversight over whether to grant the requested order.

The court then set out the principles governing when a court may refuse to make a settlement agreement an order of court, drawing on Eke v Parsons and the proposition that courts have wide power (including under section 173 of the Constitution) to regulate their own process to prevent abuse and to ensure justice is administered effectively. The court emphasised that a court is not a mere “rubber stamp” and must scrutinise proposed settlement orders. This scrutiny was regarded as particularly important in matters involving public funds, with reference to the concern recorded in Mzwakhe v Road Accident Fund about abuse of process in RAF settlements where amounts may bear no relation to the injuries sustained.

Applying these principles to the facts, the court concluded that the settlement’s components for general damages and future loss of earnings were illegitimate in the sense that they were not supported by the evidence placed before the court, and were contradicted by the plaintiff’s own industrial psychologist report. The court’s reasoning focused on the mismatch between the settlement’s premise (that the plaintiff would suffer a diminished future earning capacity warranting substantial future loss) and the IP’s collateral information demonstrating that the plaintiff had already progressed post-accident and was anticipated to progress further based on ability and qualifications. In the court’s assessment, this undermined the adverse employability projections that had been used to justify the settlement quantum under those heads.

The court also reasoned that the plaintiff’s legal representatives, having commissioned and received the relevant expert reports (including the IP report and the later WPI assessment), would have been aware of the implications of that information when quantifying the claim. On the court’s findings, pursuing general damages and future loss of earnings in the face of that evidence rendered the settlement improper and not deserving of endorsement. The court additionally referred to counsel’s duties as an officer of the court in the context of assisting the court rather than pressing for endorsement of an agreement the court considered unsupported by the evidentiary material.

Turning to the test for leave to appeal, the court applied section 17(1) of the Superior Courts Act and the interpretive guidance from cases including Zuma v Democratic Alliance, The Mont Chevaux Trust v Tina Goosen and Others, and MEC for Health, Eastern Cape v Mkhitha and Another. The court emphasised that leave requires more than an arguable case or a mere possibility of success; it requires a sound and rational basis to conclude there is a realistic chance that another court would differ.

On that standard, the court found there were no reasonable prospects of success, because the settlement’s lack of legitimacy (on the court’s factual findings) precluded endorsement, and the jurisdictional argument advanced by the applicant was contrary to established principle. The court further held that the statutory requirements for a direct appeal to the Supreme Court of Appeal were not shown to be present.

Finally, the court noted a practical issue: the omission in the prior order regarding proven past loss of earnings. The court expressed the view that this could be addressed through Uniform Rule 42 amendment once the amount was clarified, suggesting an alternative procedural route rather than appellate litigation focused on that omission.

5. Outcome and Relief

The court dismissed the application for leave to appeal. The judgment, as provided, did not record a separate or express costs order in relation to the leave application beyond the dismissal itself.

The court indicated that an omission in the earlier order concerning the plaintiff’s entitlement to proven past loss of earnings might be curable by an amendment under Uniform Rule 42, once the amount is disclosed, to avoid an appeal limited to that issue.

Cases Cited

Patronacia Maswanganyi obo Teboho Machimane v Road Accident Fund (1175/2017) [2019] ZASCA 97 (18 June 2019)

Eke v Parsons [2015] ZACC 30; 2016 (3) SA 37 (CC)

Mzwakhe v Road Accident Fund [2017] ZAGPJHC 342

Zuma v Democratic Alliance [2021] ZASCA 39 (13 April 2021)

The Mont Chevaux Trust v Tina Goosen and Others 2014 JDR 2325 (LCC)

MEC for Health, Eastern Cape v Mkhitha and Another [2016] ZASCA 176 (25 November 2016)

Legislation Cited

Superior Courts Act 10 of 2013, sections 16(1)(a)(i), 16(2)(a)(i), 17(1), and 17(6)(a)

Constitution of the Republic of South Africa, 1996, section 173

Road Accident Fund Act 56 of 1996, section 17(1) and section 17(4)

Rules of Court Cited

Uniform Rule 33(4)

Uniform Rule 49(1)(b)

Uniform Rule 42

Held

The court held that a settlement agreement concluded between litigants does not, without more, deprive the court of jurisdiction in the pending action, particularly where the court is asked to make the settlement an order of court. It held further that a court is not obliged to act as a rubber stamp for a settlement and may refuse to make it an order where its terms are inconsistent with the law, public policy, or the evidence, especially in matters involving the disbursement of public funds.

On the facts before it, the court held that the settlement terms for general damages and future loss of earnings were not legitimately supported by the collateral evidence in the plaintiff’s own industrial psychologist report, which recorded post-accident career progression and prospects that contradicted the adverse employability projections advanced in support of the settlement. It concluded that there were no reasonable prospects that another court would reach a different conclusion and therefore dismissed the application for leave to appeal.

LEGAL PRINCIPLES

The judgment applied the principle that courts retain jurisdiction notwithstanding settlement, and that the act of requesting a settlement to be made an order of court confirms the court’s continuing authority to scrutinise the proposed order within the same action.

It applied the principle that a court has a constitutional power under section 173 to regulate its process to prevent abuse and to ensure the efficient and proper administration of justice. In that context, the court is required to exercise independent oversight and may refuse to make a settlement an order where its terms are unconscionable, illegal, immoral, inconsistent with the Constitution and the law, or at odds with public policy, including where settlement amounts bear no relation to the substantiated injuries and consequences.

The judgment applied the statutory test for leave to appeal under section 17(1) of the Superior Courts Act 10 of 2013, requiring an applicant to show a reasonable prospect of success or another compelling reason. It applied authority emphasising that more than a mere arguable case is required; there must be a sound, rational basis for concluding that another court would likely differ.

It further reflected the procedural principle that certain omissions or errors in an order may, where appropriate, be corrected through amendment mechanisms such as Uniform Rule 42, rather than necessarily through an appeal, depending on the nature of the omission and the available information.

Ubisi v Road Accident Fund [2023] ZAGPPHC 244; 64167/2017 (5 April 2023)