SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 156/22
In the matter between:
TUMELO MAFISA Applicant
and
ROAD ACCIDENT FUND Respondent
and
PERSONAL INJURY PLAINTIFF LAWYERS
ASSOCIATION Amicus Curiae
Neutral citation: Mafisa v Road Accident Fund and Another [2024] ZACC 4
Coram: Zondo CJ, Kollapen J, Mathopo J, Mhlantla J, Rogers J,
Schippers AJ, Theron J, Tshiqi J and Van Zyl AJ
Judgment: Mhlantla J (unanimous)
Heard on: 18 August 2023
Decided on: 25 April 2024
Summary: Road Accident Fund — settlement agreement — High Court’s
unilateral alt eration of settlement agreement irregular and
improper
MHLANTLA J
2
ORDER
On appeal from the High Court of South Africa, Free State Division, Bloemfontein:
1. Leave to appeal is granted.
2. The appeal is upheld.
3. The order of the High Court is set aside and is replaced with the
following:
“The draft order marked “X” is made an order of court.”
4. There is no order as to costs.
JUDGMENT
MHLANTLA J (Zondo CJ, Kollapen J, Mathopo J, Rogers J, Schippers AJ, Theron J,
Tshiqi J and Van Zyl AJ concurring):
Introduction
[1] Persons inju red in a motor vehicle accident are entitled to claim damages
against the R oad Accident Fund (R AF), an organ of state created in terms of section
2(1) of the Road Accident Fund Act 1 (Act), provided that they are able to establish
fault on the part of the driver. The RAF will assess the claim and decide whether to
admit or dispute liability. Where liability is admitted, it will decide on the quantum of
damages to be offered. 2 Before 1 June 2020, claims were dealt with by a panel of
1 56 of 1996.
2 The quantum of damages offered is determined based on an assessment of serious injury by a registered
medical practitioner which provides the basis for determining claims for future medical treatment and future loss
of income or support. The method of assessment to determine whether a serious injury was incurred is set out in
the Road Accident Fund Regulations GN R770 and 771 GG 31249, 21 July 2008.
MHLANTLA J
3
attorneys appointed by the RAF in terms of service level agreements. Thereafter, the
RAF terminated the mandate of i ts panel attorneys .3 Since that time, claims for
damages against the RAF have been dealt with and, where appropriate, settled by the
claims handlers.
[2] Since the RAF terminated the mandate of its panel attorneys, there have been
complaints by claimants that claims are not attended to or finalised timeously and that,
in certain instances , the RAF has been the cause of delays. There have also been
allegations of the inflation of claims and the submission of claims that did not have
merit. In some cases, when Judges were approached to make RAF settlement
agreements orders of court, they were reluctant to accede to the requests as they
perceived that many of the claims and the settlements agreed upon were inflated.4 In
certain instances, some Judges have refused to grant the order s unless evidence wa s
adduced to substantiate the agreed amount and/or liability . In others, where the High
Courts were not satisfied, the terms of the settlement agreement were unilaterally
altered. As a result, Judges of the various Divisions of the High Court have found
themselves acting as “guardians” or “custodians” of the public purse.
[3] The application before this Court is one of those cases where the High Court
unilaterally altered the terms of a settlement agreement. It is an application for leave
to appeal against a judgment and order of the High Court of South Africa, Free State
Division, Bloemfontein (High Court).5 In essence, this application concerns whether a
3 The termination of these service level agreements (SLAs) is discussed in Road Accident Fund v Mabunda
Incorporated; Minister of Transport v Road Accident Fund [2022] ZASCA 169; [2023] 1 All SA 595 (SCA).
4 See Mzwakhe v Road Accident Fund , unreported judgment of the High Court of South Africa, Gauteng
Division, Johannesburg, Case No 24460/2015 (26 October 2017) ( Mzwakhe) at paras 22 and 26 . In Mzwakhe,
the High Court was asked to make a settlement agreement an order of court. The Judge considered the medico-
legal reports in the court file and decided, on the documents before her, that the applicant was not entitled to any
amount for loss of earnings. Consequently, she refused to make the settlement agreement an order of court,
referred the case back to the Registrar for the purpose of pleadings to be filed and interdicted the RAF from
paying the applicant “any amount in settlement of the entire claim without a court order first being obtained” .
See also Maswanganyi v Road Accident Fund [2019] ZASCA 97; 2019 (5) SA 407 SCA (Maswanganyi); MT v
Road Accident Fund; HM v Road Accident Fund 2021 (2) SA 618 (GJ) and Ketsekele v R oad Accident Fund
2015 (4) SA 178 (GP).
5 Mafisa v Road Accident Fund , unreported judgment of the High Court of South Africa, Free State Division,
Bloemfontein, Case No 3064/2018 (15 June 2021) (High Court judgment).
MHLANTLA J
4
court may unilaterally amend a settlement agreement concluded by the litigating
parties.
Parties
[4] The applicant is Mr Tumelo Mafisa. The RAF was cited as the only
respondent in these proceedings and filed a notice to abide. As a result, this Court
directed a request to the General Council of the Bar of South Africa (Bar Council) to
appoint counsel to assist the Court by preparing written submissions and making such
arguments as they deemed or felt proper in support of a High Court's power to
investigate the merits of a settlement. The Bar Council nominated
Mr N Snellenburg SC as the Court appointed counsel. The Court appointed counsel
filed written submissions as directed by the Court and made oral submissions at the
hearing. The Court wishes to extend its gratitude to Mr Snellenburg SC for his
assistance.
[5] The Personal Injury Plaintiff Lawyers Association (PIPLA) was admitted as
amicus curiae in these proceedings. In terms of its submissions to this Court, PIPLA
purports to represent the interests of approximately 400 legal practitioner members
who represent or assist persons who have been injured in motor vehicle accidents.
Background
[6] On 31 January 2016, Mr Mafisa, who was 29 years old at the time, was a
passenger in a motor vehicle when the driver of the vehicle collided with a tree. As a
result, Mr Mafisa suffered bodily injuries which included a fracture of the left
proximal humerus, abrasions of the lower back and lacerations of the scalp . He
suffered damages in the form of medical expenses, loss of earnings and general
damages. According to him, the accident was caused by the sole negligence of the
driver.
MHLANTLA J
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Litigation history
High Court
[7] The applicant issued summons in the High Court against the RAF and claimed
an amount of R2 387 568.00 for past and future medical expenses, past and future loss
of earnings and general damages. His pleaded claim in respect of past and future loss
of earnings was R1 537 568.00. The RAF filed its plea and, save to state that the
applicant had provided his hospital records, it disputed liability and the quantum of the
claim. The RAF’s attorneys subsequently withdrew as attorneys of record.
[8] The matter was enrolled for hearing on 11 and 12 May 2021 in the High Court
before Daniso J. On the first day of the hearing, the parties requested that the matter
stand down for settlement negotiations. The next day, the Judge was advised that the
parties had concluded a settlement agreement. There was no hearing and no evidence
was adduced.
[9] The parties then approached the Judge and requested her to make the settlement
agreement an order of court. The relevant terms of the agreement were as follows:
“1.1 The Defendant is liable to pay 100% . . . of the proven or agreed damages;
1.2 The Defendant shall pay the Plaintiff the sum of R1 652 715.70 . . .
The amount is made up as follows:
Loss of earnings: R1 302 715.70
General damages: R350 000.00
Total: R1 652 715.70
1.3 The Defendant shall pay the amount of R1 652 715.70 . . . into the Plaintiff’s
attorney’s trust account.”
MHLANTLA J
6
[10] In terms of the agreement, the RAF would also provide an undertaking in terms
of section 17(4)(a) of the Act in respect of medical costs and pay Mr Mafisa’s taxed
costs.6
[11] The Judge was in possession of the court file which contained the pleadings ,
the applicant’s expert reports from an industrial psychologist, occupational therapist,
orthopaedic surgeon and an actuarial report. The parties approached the Judge in
chambers and requested her to make a draft consent order incorporating the terms of
their settlement agreement an order of court . The Judge, without elaborating,
indicated that she was not entirely satisfied with the terms of the draft order. She
reserved judgment to consider the proposed settlement.
[12] On 15 June 2021, the High Court handed down a written judgment. In its
judgment, the Court unilaterally amended the settlement agreement . The High Court
stated:
“Upon examination of the draft order, I was satisfied that the award of damages
tendered by the defendant is commensurate to the loss suffered by the plaintiff,
except for the loss in respect of earnings. The circumstances under which the
defendant made the tender to settle the da mages herein were not clear as there was no
adequate proof that the plaintiff was employed pre-accident.
No oral evidence was led. The plaintiff relied on the actuarial report by Mr Sauer to
quantify the amounts of R206 739.00 and R1 330 829.00 respectively. The
calculations are based on the industrial psychologist’s report which I find not to be
persuasive under these circumstances. It is alleged that du ring the period 2013 to
2016 the plaintiff was self -employed in his own construction business earning about
R2 500.00 per month. Inexplicably, it is also stated that towards the end of 2015, the
6 Section 17(4) of the Act outlines the procedures and limits for compensation claims under certain
circumstances. For claims involving future accommodation costs in a hospital or nursing home, treatment, or
other services or goods, the RAF or its agent can compensate the third party directly after the costs have been
incurred and proven or compensate the service provider according to a specified tariff. For claims related to loss
of income or support, the compensation amount can be paid either as a lump sum or in agreed -upon instalments.
The maximum annual compensation for loss of income or support is capped at R342 336.00 per year per
claimant, regardless of the actual loss suffered.
MHLANTLA J
7
plaintiff’s business was not making enough money, the income was not constant as a
result he started looking for work at various construction sites.
It does not end there, the damages claimed by the plaintiff herein are not even pleaded
paragraph 6 of the plaintiff’s particulars of claim, the plaintiff merely alleged: ‘As a
result of the i njuries which the plaintiff sus tained in the aforementioned accident, he
suffers inter alia the following sequelae [condition resulting from a disease or
injury]: . . . May have a loss of earnings/earning capacity in future’.”7
[13] The High Court found the industrial psychologist’s report unpersuasive and
held that it failed to prove that the applicant sustained damages with respect to past
and future loss of earnings . The Court refused to award the applicant the agreed
quantum of damages in respect of loss of earnings, that is, R1 302 715.70, on the basis
that the tender by the RAF was not justified. The Court unilaterally amended the draft
order by striking out the amount in respect of loss of earnings and awarded the
applicant R350 000.00 in respect of general damages only.
[14] The applicant applied for leave to appeal against the order of the High Court to
a Full Court , alternatively to the Supreme Court of Appeal . On 14 December 2021,
the High Court dismissed the application with costs.
Supreme Court of Appeal
[15] Aggrieved by the decision of the High Court, the applicant petitione d the
Supreme Court of Appeal, but without success . An application to the President of the
Supreme Court of Appeal for reconsideration in terms of section 17(2)(f) of the
Superior Courts Act8 suffered a similar fate.
7 High Court judgment above n 5 at paras 6-8.
8 10 of 2013.
MHLANTLA J
8
In this Court
Applicant’s submissions
[16] The applicant submits that the matter raises two constitutional issues. First, the
unilateral alteration of a settlement agreement without affording parties an opportunity
to be heard amounts to a procedural and substantive irregularity. In this manner, the
applicant submits that his right to a fair hearing was infringed and basic notions of
fairness and justice were undermined. The applicant further argues that despite the
presence of evidence of the impact of his injuries on his earning capacity, he now
faces an impoverished future without the just, reasonable and fair compensation to
which he is entitled. He submits that this denial amounts to an infringement of his
right to equality and human dignity. The second constitutional issue raised by the
applicant is that the High Court discarded its role as impartial arbiter when it stepped
into the role of the Executive as the guardian of public funds, thereby infringing the
separation of powers doctrine.
[17] In this regard, the applicant highlights the purpose of a settlement agreement –
to bring an end to existing litigation or to prevent or avoid future litigation. The
applicant emphasises that the settlement agreement concluded by the parties created a
substantive contract with new rights and obligations that exist independently of the
original cause. As such, the original cause is res judicata (a matter already judged)
and the Court could not have interfered in the agreement.
[18] The applicant recognises the discretion of courts to make a settlement
agreement an order of court and that a court, in exercising this discretion, must
consider all relevant factors set out by this Court in Eke.9 According to the applicant,
the High Court should have demanded that the parties engage it on aspects that it took
issue with instead of amending the settlement agreement by striking out the agreed
9 Eke v Parsons [2015] ZACC 30; 2015 (11) BCLR 1319 (CC); 2016 (3) SA 37 (CC).
MHLANTLA J
9
amount for loss of earnings . Had the parties been granted such an opportunity, an
award for loss of earnings would have been made.
[19] The applicant also submits that this matter raises an arguable point of law of
general public importance, namely whether a High Court can of its own accord alter a
settlement agreement without affording the parties an opportunity to be heard, thereby
binding parties to an agreement they did not intend to make. He contends that the
High Court essentially became a party to the agreement. The applicant submits that
the issues raised are of general public importance as settlement agreements are the
norm in RAF litigation and affect scores of other litigants who approach the courts to
have settlement agreements made orders of court.
PIPLA’s submissions
[20] PIPLA’s submissions are similar to those of the applicant and focus on the
Court’s jurisdiction in respect of settlement agreements. PIPLA reiterates that
jurisdiction is determined by the dispute between the parties and th at a compromise,
whether embodied in a court order, terminates the litigation between the parties and
thus has the effect of res judicata. PIPLA argues that the parties did not approach t he
High Court to pronounce on the validity and enforceability of the settlement
agreement and, therefore, the High Court did not have the power to do so.
[21] Even if there were a dispute between the parties regarding the terms of the
settlement agreement, PIPLA argues that the High Court’s subjective view as to
whether the settlement is reasonable or justifiable is immaterial. In support of this,
PIPLA states that a compromise will sometimes be for more than what a court may
have ordered, and on other occasions, less. The risk that a compromise may b e for
more or less than what a c ourt would have ordered is not offensive to public policy or
the law. Instead, it is a risk both parties voluntarily assume.
[22] Therefore, PIPLA submits that the applicant exercised his contractual freedom
to conclude a compromise on terms agreeable to him and not on terms that may
MHLANTLA J
10
eventually be agreeable to a court. In turn, the RAF voluntarily made an offer of
settlement which the applicant accepted. PIPLA argues that the unilateral variation of
the draft order infringed the applicant’s right to contract freely and also offends and
disregards the parties’ right to settle their dispute voluntarily on mutually agreeable
terms.
[23] Like the applicant, PIPLA argues that the High Court’s unilateral alteration of
the settlement agreement amounts to an infringement of the separation of powers
doctrine. PIPLA highlights that the RAF is a creature of statute, authorised to settle
disputes with claimants. The Act, moreover, does not empower courts to oversee the
finances and management of the RAF. As a result, and in the absence of a pleaded
challenge to a settlement agreement, PIPLA submits that the High Court’s unilateral
alteration amounts to an impermissible intrusion by the court into the sphere of the
Executive. By acting as the custodian of RAF, the High Court infringed the
applicant’s right to equal treatment before the law.
[24] PIPLA accepts that a settlement agreement can only be made an order of court
if it is competent and proper. According to PIPLA, the settlement agreement between
the applicant and the RAF complied with all three requirements set out by this Court
in Eke. Con sequently, if the High Court were of the view that the terms of the
settlement agreement offend ed any one of those grounds, it should have invited the
parties to make submissions before making its decision. By not doing so and instead
deciding a disput e that it was not ca lled upon to decide, PIPLA submit s that the
High Court infringed the parties ’ right to have their dispute resolved by the
application of law decided in a fair public hearing.
[25] PIPLA further argues that , if a compromise is challenged by the court and not
the parties themselves, a dispute arises between the parties , on the one hand , and the
court, on the other. The court’s obligation to be independent and apply the law
impartially and without fear, favour or prejudice would impede the court from being
able to determine the outcome of that dispute. As the three requirements set out in
MHLANTLA J
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Eke have been met, PIPLA submits that the appropriate relief for this Court to grant is
to make the draft order agreed to by the parties an order of court.
Court appointed counsel’s submissions
[26] According to the counsel appointed to assist the Court , the High Court’s point
of departure was that the parties requested it to determine a dispute. The parties,
however, requested that the draft order, which represented the settlement of the matter
between them, be made an order of court. The Court appointed counsel submits that
he cannot advance submissions in support of a High Court’s power to investigate the
merits of a settlement, as such a power would amount to adjudicating a dispute where
none exists as a result of a compromise. For such a power to exist, the common law
would have to be developed to vest such a power in the High Court. The one
exception to this rule, the Court appointed counsel submits, is the requirement that the
best interests of a child are paramount in all matters that involve them.
[27] The Court appointed counsel further argue s that a court’s power to make a
settlement agreement an order of c ourt requires a determination whether it would be
appropriate to incorporate the terms of the compromise into an order of court. If a
court finds that the requirements of Eke are not satisfied, it will not make the
settlement agreement an orde r of court. However, the court would not be entitled to
amend or modify a settlement agreement of its own accord.
[28] While a court is obliged to deal with the misappropriation of public funds if it
is properly raised, the Court appointed counsel submits that courts do not have a
general duty or the power to exercise oversight over the expenditure of public funds.
The separation of power s doctrine countermands this. The Court appointed counsel
submits that the exercise of such power without the issue being raised infringes the
right to a fair public hearing and the principle that a court may only decide issues
raised by the parties. Ultimately, the perception that a system of state administration
is broken, is not a licen ce for a court to disregard the fundamental principles of
procedural or substantive law.
MHLANTLA J
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Issues
[29] The issues for determination are:
(a) Whether leave to appeal should be granted?
(b) If so, whether a court is empowered to amend a settlement agreement
concluded by the parties?
(c) If a court considers that it should not make a compromise an order of
court, what procedures should it follow?
(d) What is the appropriate remedy, if any?
Jurisdiction and leave to appeal
[30] It is common cause between the parties that the High Court failed to apprise the
parties of its concerns and then proceeded to unilaterally amend the settlement
agreement. The failure to do so implicates the right to a fair public hearing,
guaranteed in section 34 of the Constitution .10 In Olesitse,11 this Court held that the
prevention of a party from having their claim resolved by the application of law before
a court implicates section 34 of the Constitution and “[t]hat, without doubt, engages
this Court’s jurisdiction.”12 Accordingly, this Court’s jurisdiction is engaged.
[31] A conclusion by this Court that a matter engages its jurisdiction does not lead
to a conclusion that the matter must be entertained. 13 This Court must still satisfy
itself that it is in the interests of justice to grant leave to appeal . In this regard, the
Court must consider the prospects of success , the importance of the issues and
whether the determination of the matter will have an impact on ly on the parties before
10 Section 34 states:
“Everyone has the right to have any dispute that can be resolved by the application of law
decided in a fair public hearing before a court or, where appropriate, another independent and
impartial tribunal or forum.”
11 Mmabasotho Christinah Olesitse N.O. v Minister of Police [2023] ZACC 35; 2024 (2) BCLR 238 (CC).
12 Id at para 36.
13 Paulsen v Slip Knot Investments 777 (Pty) Ltd [2015] ZACC 5; 2015 (3) SA 479 (CC); 2015 (5) BCLR 509
(CC) at para 18.
MHLANTLA J
13
the Court or beyond them.14 It is imperative that the constitutional issues raised by the
present case be determined , due to the prevalence of the cases and the manner in
which some of the Divisions of the High Court have dealt with settlement agreements.
There are also reasonable prospects of success and, therefore, leave to appeal should
be granted.
Appeal: principles relating to compromise
[32] Before dealing with the issues in this matter, it is necessary to consider the
legal principles relati ng to a compromise and set out the nature and extent of a
compromise.
[33] A compromise is an agreement between the parties to prevent or terminate a
dispute by adjusting their differences by mutual consent. It is trite that a compromise
gives rise to new contractual rights and obligations which exist independently of the
original cause of action. Once a compromise is reached, the parties are precluded
from proceeding on the original cause of action (unless, of course, the compromise
provides otherwise).15
[34] Inherent in the concept of a compromise is the risk , which is voluntarily
assumed by both parties , that their bargain may be more or less advantageous than
litigating the original cause of action. Lawfully struck compromises find support in
our law as they not only serve the interest s of the litigants but may also serve the
interests of the administration of justice.16
14 S v Boesak [2000] ZACC 25; 2001 (1) SA 912 (CC); 2001 (1) BCLR 36 (CC) at paras 11-2.
15 Road Accident Fund v Ngubane [2007] ZASCA 114; 2008 (1) SA 432 (SCA) at para 12.
16 Eke above n 10 at para 22 referring to Ex parte Le Grange In re: Le Grange v Le Grange 2013 (6) SA 28
(ECG) (Le Grange) at paras 34, 36 and 38. In the South African Law Reports, Le Grange is reported sub nom
PL v YL.
MHLANTLA J
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[35] The High Court in Le Grange cited the statement made by the Appellate
Division in Schierhout,17 where it was said that “ [t]he law, in fact, rather favours a
compromise (transactio), or other agreements of this kind ; for interest rei publicae ut
sit finis litium [it is in the public interest that there be an end to litigation] ”.18 The
court’s authority is limited to the issues in the action brought before the court and the
issues that the parties have specifically raised in their pleadings.
[36] Contractual agreements concluded freely and voluntarily by the parties ought to
be respected and enforced . T his is in accordance with the established principle
pacta sunt servanda (agreements must be honoured). In Barkhuizen,19 this Court
considered the constitutionality of a time limitation clause in a short -term insurance
policy which prevented an insured claimant from instituting legal action if summons
was not served on the insurance company within the time limit set out in the clause. 20
In approaching this question, Ngcobo J, writing for the majority, recognised the
importance of giving effect to parties’ freedom to contract in a manner that does not
override the right of access to courts.21 In this regard, he stated:
“Self-autonomy, or the ability to regulate one’s own affairs, even to one’s own
detriment, is the very essence of freedom and a vital part of dignity. The extent to
which the contract was freely and voluntarily concluded is clearly a vital factor as it
will determine the weight that should be afforded to the values of freedom and
dignity.”22
[37] In Beadica,23 the applicants were four close corporations which owned and
operated franchises on the respondent’s premises. 24 The premises were leased to the
17 Schierhout v Minister of Justice 1925 AD 417 (Schierhout).
18 Id at 425.
19 Barkhuizen v Napier [2007] ZACC 5; 2007 (5) SA 323 (CC); 2007 (7) BCLR 691 (CC).
20 Id at para 1.
21 Id at para 55.
22 Id at para 57.
23 Beadica 231 CC v Trustees for the time being of Oregon Trust [2020] ZACC 13; 2020 (5) SA 247 (CC); 2020
(9) BCLR 1098 (CC).
MHLANTLA J
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applicants for a period of five years, with an option to renew the lease agreement for a
further five years .25 The applicants failed to exercise the renewal option within the
required notice period . Despite the applicants having belatedly sought to renew the
lease agreement , the respondent demanded that they vacate the premises .26 The
applicants sought an order declaring that the renewal options had been validly
exercised and that the respondent be prohibited from taking steps to evict the m.27
Writing for the majority, Theron J explained:
“The enforcement of contractual terms does not depend on an individual judge’s
sense of what fairness, reasonableness and justice require. To hold otherwise would
be to make the enforcement of contractual terms dependent on the ‘idi osyncratic
inferences of a few judicial minds ’. This would introduce an unacceptable degree of
uncertainty into our law of contract. The resultant uncertainty would be inimical to
the rule of law.”28
[38] Therefore, courts should not readily second -guess parties’ decision to settle the
issues as they defined them in their pleadings.
[39] In Eke,29 the applicant defaulted on his payments under a sale agreement to
purchase the membership interest of the respondent in a close corporation. After the
respondent applied for summary ju dgment, the parties concluded a settlement
agreement which was made an order of court. The issue before this Court concerned
the status of settlement agreements that had been made orders of court and what terms
may or may not be contained in those agreements. 30 In particular, this Court had to
determine whether a settlement agreement which has been made an order of court was
24 Id at para 2.
25 Id at paras 5-6.
26 Id at paras 7-8.
27 Id at para 10.
28 Id at para 81.
29 Eke above n 10.
30 Id at paras 1-3.
MHLANTLA J
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final in its terms and whether the other party was entitled to approach a court for the
enforcement of the order.
[40] Writing for the majority, Madlanga J cautioned against the notion that anything
agreed to by the parties should be accepted by a court when considering whether to
make an agreement an order of court. He went on to say that, when parties approach a
court to make a compromise an order of court, it must be competent and proper in that
the agreement must: (a) relate directly or indirectly to the dispute between the parties;
(b) not be objectionable in that it must accord with the Constitution and the law and
not be offensive to public policy ; and (c) hold some practical and legitimate
advantage.31
[41] In Motswai,32 the High Court refused to make a settlement agreement between
the applicant and the RAF an order of court. In a scathing judgment, the High Court
expressed the view 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 ”.33 The High Court referred its judgment to a number of
professional bodies, including the Law Society of the Northern Provinces, the
Bar Council, and the Health Professions Council to investigate possible professional
misconduct.34 On appeal, the Supreme Court of Appeal held—
“[t]he wide-ranging findings in the first judgment against individuals who were not
called upon to defend themselves cannot stand for this reason alone.
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
31 Id at paras 25-6.
32 Motswai v Road Accident Fund [2014] ZASCA 104; 2014 (6) SA 360 (SCA).
33 Id at para 15.
34 Id at para 29.
MHLANTLA J
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serious consequences must be proved by the ‘clearest’ evidence or ‘clear and
satisfactory’ evidence or ‘clear and convincing’ evidence, or some similar phrase. 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.”35
[42] Finally, in Taylor,36 as was the case in Eke, the question regarding the
consequences of a settlement agreement to a dispute and the powers of a court in
relation thereto arose. Taylor concerned two actions against the RAF which were
settled without proceeding to trial. 37 The High Court in respect to both actions had
raised concerns over the settlements reached. In its judgment, the Supreme Court of
Appeal reiterated the principle s outlined in Eke and confirmed that a compromise
extinguishes disputed rights and obligations , puts an end to litigation , and has the
effect of res judicata.38 The Supreme Court of Appeal further held that—
“when the parties to litigation confirm that they have reached a compromise, a court
has no power or jurisdiction to embark upon an enquiry as to whether the
compromise was justified on the merits of the matter or was validly concluded.
When a court is asked to make a settlement agreement an order of court, it has the
power to do so. The exercise of this power essentially requires a determination of
whether it would be appropriate to incorporate the terms of the compromise into an
order of court.”39
[43] The Supreme Court of Appe al went on to consider the earlier decision of that
Court in Maswanganyi,40 where the applicant had reached a settlement agreement with
35 Id at paras 45-6.
36 Road Accident Fund v Taylor [2023] ZASCA 64; 2023 (5) SA 147 (SCA).
37 Id at para 1.
38 Id at paras 36 and 40-1.
39 Id at para 51.
40 Maswanganyi above n 4.
MHLANTLA J
18
the RAF and asked the High Court to make their settlement agreement an order of
court. In that case, t he High Court declined to do so on the basis that it was not
persuaded that the insured drive r was negligent. 41 On appeal, the applicant argued
that the trial court’s jurisdiction had been terminated when the parties concluded their
settlement.42 The Supreme Court of Appeal in Maswanganyi held:
“When the parties arrive at a settlement, but wish that settlement to receive the
imprimatur of the court in the form of a consent order, they do not withdraw the case
from the judge, but ask that it be resolved in a particular way. The grant of the
consent order will resolve the pleaded issues and possibly issues related ‘directly or
indirectly to an issue or lis between the parties ’. Contrary to the passages quoted
above, the jurisdiction of the court to resolve the pleaded issues does not terminate
when the parties arrive at a settlement of those issues. If it did, the court would have
no power to grant an order in terms of the settlement agreement.”43
[44] According to t he Supreme Court of Appeal in Taylor, the decision in
Maswanganyi contradicts the common law principle that a compromise extinguishes
disputed issues, thereby putting an end to litigation. 44 Furthermore, in this manner,
Maswanganyi goes against the import of Eke that—
“the court’s power to make a compromise a settlement agreement arises from a long -
standing practice, and not ‘from the jurisdiction of the court to resolve pleaded issues’
or ‘the court’s jurisdiction to adjudicate upon the issues in the litigation’.”45
[45] In this regard, it must be borne in mind that judicial power, including the power
to make settlement orders, derives from the Constitution itself .46 For these reasons,
41 Id at para 3.
42 Id at para 8.
43 Id at para 15.
44 Taylor above n 37 at para 48.
45 Id.
46 South African Broadcasting Corporation Limited v National Director of Public Prosecutions [2006] ZACC
15; 2007 (1) SA 523 (CC); 2007 (2) BCLR 167 (CC) (South African Broadcasting Corporation) at para 88.
MHLANTLA J
19
the Supreme Court of Appeal in Taylor held that Maswanganyi was wrong and should
not be followed. Ultimately, in the absence of developing the common law, the Court
was bound by those principles.47
[46] I now proceed to consider the circumstances of this case and determine whether
the judge was entitled to unilaterally amend the settlement agreement.
Analysis
The High Court disregarded the parties’ agreement and made an order that
was adverse to them
[47] In an unopposed application, t he High Court was presented with a settlement
agreement which it was asked to make an order of court. The Court did not divulge to
the parties its concerns in respect of the proposed quantum of damages . Instead it
indicated that it needed time to consider the settlement. This was on 12 May 2021.
As stated earlier, the judgment was handed down o n 15 May 2021. At no stage were
the parties afforded an opportunity to address the Court’s concerns if they so wished.
In fact, they were not aware of any concerns and were surprised by the outcome. This
is despite the obligation on courts to hear the parties before making an order that is
adverse to them. Therefore, the audi alteram partem (hear the other side) principle
was not adhered to.48
The High Court exceeded the limits of a court’s jurisdiction
[48] It is well -established that a compromise, whether embodied in a court order
generally brings an end to the dispute between the parties . Once there is a
compromise, there is no longer a lis (dispute) between the parties. However, this does
not mean that a court has no power to raise concerns over settlement agreements.
When asked to make a settlement agreement an order of court, Eke demands of the
47 Taylor above n 37 at para 49.
48 Public Protector v President of the Republic of South Africa [2021] ZACC 19; 2021 (6) SA 37 (CC); 2021 (9)
BCLR 929 (CC) (Public Protector) at paras 178-9.
MHLANTLA J
20
courts to ensure that the agreement is competent and proper before it can be given the
seal of a court order.49 As stated above, a settlement agreement will be competent and
proper if it (a) relate s directly or indirectly to the dispute between the parties; (b)
“accord[s] with both the Constitution and the law [and] must not be at odds with
public policy” and (c) hold s some practical and legitimate advantage .50 The second
element – that a settlement agreement must not be objectionable in law or offensive to
public policy – is relevant to this case.
[49] The precepts on public policy are set out in Barkhuizen. At its core, public
policy represents the legal convictions and values of society. In South Africa, public
policy is deeply rooted in the Constitution and its underlying values .51 Where a
contractual term conflicts with a constitutional value, it will be contrary to public
policy and unenforceable .52 In deciding whether public policy tolerates time
limitation clauses in contracts between private parties, Ngcobo J explained:
“On the one hand, public policy, as informed by the Constitution, requires, in general,
that parties should comply with contractual obligations that have been freely and
voluntarily undertaken. . . . The other consideration is that all persons have a right to
seek judicial redress.”53
[50] As a general rule, a Judge should not interfere with the terms of a settlement
agreement. A Judge is, however, entitled to raise concerns in certain circumstances .
The concerns contemplated by Eke are concerns arising from the terms of the
settlement agreement itself. A settlement agreement may offend public policy if there
is a significant difference between the amount in the settlement agreement and the
amount that could reasonably be expected to be agreed on between the parties in
49 Eke above n 10 at para 25.
50 Id at paras 25-6.
51 Barkhuizen above n 20 at para 28.
52 Id at paras 29-30.
53 Id at para 57.
MHLANTLA J
21
similar cases, or decided by a court had the matter gone to trial , so as to give rise to a
reasonable suspicion that the amount ma y have been inflated or that there may be
corruption involved. In the case of settlement agreements relating to damages,
unlawfulness would not usually appear ex facie the agreement, and so the scope for
raising concerns on that ground would be limited. However, since the settlement
agreement purports to be a settlement of an existing lis, a court is entitled to look at
the pleadings. A Judge may, for example, find the terms of a settlement agreement
incompetent in law such as to raise an exceptional circumstance sufficient for a Judge
to alert the parties to her concerns. Furthermore, i f, for example, a settlement
agreement includes heads of damages which are not the subject of a claim in the
particulars of claim, this could be questioned. The same would be true if the
settlement involves the payment of an amount exceeding the pleaded claim because
then it would not seem to be a settlement. Nonetheless, even in these circumstances,
courts do not have free reign and must exercise restraint to ensure that there is no
undue imposition on contractual freedom. Where a Judge raises concerns, the grounds
thereof should be clear and may not be based on information retrieved from
inadmissible evidence. Two possibilities then arise.
[51] First, the Judge may refuse to make the settlement agreement, an order of court.
Second, the Judge may notify the parties of her concerns. It must be emphasised that
the Judge is not entitled to demand the parties to address these concerns. Once the
Judge has informed parties of her concerns, the parties may elect not to address the
concerns and indicate to the Judge that they regard the matter as settled between them.
In such a case, the Judge will note on the court file that the matter has been settled
between the parties and that the settlement agreement will not be an order of court. If
the parties elect to address the issues rais ed and the Judge is satisfied, the settlement
agreement will be made an order of court. If the Judge is not satisfied, she will refuse
to do so. However, the fact that the Judge refused to make the settlement agreement
an order of court does not mean that the settlement agreement is invalid. Whether the
settlement agreement is valid depends on its terms and the law.
MHLANTLA J
22
[52] In all the se possibilities, the Judge may advise the parties on how they may
address the concerns raised. The parties are at liberty to take the advice and amend
the settlement agreement accordingly or reject the Judge’s advice. Similarly, the
matter may proceed to a hearing or trial depending on how the parties elect to deal
with the concerns raised. In essence, therefore, a Judge is entitled to raise concerns –
what the parties do afterwards is not determined by the Judge but by the parties. If a
Judge has concerns arising from the pleadings before it, these have to be raised with
the legal representative so that the parties may decide whether they wish to persuade
the Judge in which case they may address the concerns or elect not to do so. Judges
are neither obliged nor entitled to assess the propriety of a settlement agreement with
reference to inadmissible evidential material.
[53] In the present matter, the C ourt was presented with a settlement to be m ade an
order of court. If the C ourt were disinclined to do so, the parties should have been
informed of its concerns and given the opportunity to consider their position, whether
they wished to address the issues raised or not. However, the caveat here is that there
would have had to be admissible evidence before the Court, which was not the case
here. The High Court, in reaching its conclusion, had regard to the information
obtained from the expert reports in the court file which were never placed as evidence
before it. It found the industrial psychologist’s report unpersuasive and held that it
failed to prove that the applicant sustained damages with respect to past and future
loss of earnings. The High Court went on to refuse the agreed award for loss of
earnings. In doing so, it ignored the warnings of the Supreme Court of Appeal set out
in Motswai.54 In the present matter, t here was no live dispute between the parties.
They had settled their litigious dispute, thereby terminating the court’s authority or
jurisdiction to pronounce on it. As the validity and terms of the compromise were not
in dispute, it was not open to the court to pronounce on it either.
54 Motswai above n 33 at paras 45-6.
MHLANTLA J
23
Conclusion
[54] In light of the above, the High Court exceeded its jurisdiction when it
unilaterally amended the settlement agreement . Its unilateral alterations to the
agreement were improper. As there was no hearing since the parties had settled the
dispute between them, it was improper and irregular for the High Court to have
considered the actuarial and industrial psychologist’s reports to reject the agreed
settlement for loss of earnings, as those reports were not properly before the Court . It
also failed to raise i ts concerns with the applicant and the RAF to enable them to
decide whether to provide additional material in an effort to persuade the Judge or
elect not to do so. Had it done so, the parties could have elected to address the Court’s
concerns or declined to do so. In the latter case, the Court would have been entitled to
refuse to make the settlement an order of court on any of the grounds provided for in
Eke if this were justified. In the result, the appeal must be upheld and the order of the
High Court set aside.
Remedy
[55] As there is no evidence of impropriety in relation to the settlement agreement ,
there is no basis for a remittal . Furthermore, there is nothing that caused the Judge to
refuse to make the settlement agreement an order of court, apart from the actuarial and
industrial psychologist reports (which are not evidence). The order of the High Court
must be replaced with one making the original settlement agreement agreed to by the
parties an order of court. That agreement which was presented to Daniso J is attached
to this judgment and marked “X”. As to costs, the RAF was not responsible for the
impermissible alteration which the High Court made to the draft order. The RAF did
not oppose the application for leave to appeal. There should thus be no order for costs
beyond those already provided for in the draft order.
Order
[56] In the result, the following order is made:
1. Leave to appeal is granted.
MHLANTLA J
24
2. The appeal is upheld.
3. The order of the High Court is set aside and is replaced with the
following:
“The draft order marked “X” is made an order of court.”
4. There is no order as to costs.
For the Applicants:
For the Amicus Curiae:
For the Court appointed counsel:
BP Geach SC, NJ Potgieter,
FHH Kehrhahn, L Mastoroudes and
P Grimbeek instructed by VLZR
Incorporated
AP Joubert SC, NJ Horn and M Madi
instructed by De Broglio Attorneys
Incorporated
N Snellenburg SC, MS Mazibuko and
TM Ngubeni
1
“X”
IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
Roll # x
Case number: 3064/2018
Bloemfontein on this 12th day of May 2021
Before the Honourable Justice Daniso
In the matter between:
TUMELO MAFISA Plaintiff
and
ROAD ACCIDENT FUND Defendant
CLAIM NO: 560/12385488/1034/2
LINK NO: 428491
DRAFT ORDER
BY AGREEMENT BETWEEN THE PARTIES AND AFTER HAVING READ
AND CONSIDERED THE PAPERS, IT IS ORDERED THAT:
1.
1.1. The Defendant is liable to pay 100% costs (ONE HUNDRED PERCENT) of
the proven and agreed damages;
1.2. The Defendant shall pay the Plaintiff the sum of R1 652 715.70 (ONE
MILLION SIX HUNDRED AND FIFTY -TWO THOUSAN D SEVEN
HUNDRED AND FIFTEEN RAND AND SEVENTY CENTS).
2
The amount is made up as follows:
Loss of Earnings: R1 302 715.70
General Damages: R350 000.00
Total: R1 652 715.70
1.3. The Defendant shall pay the amount of R 1 652 715.70 (ONE MILLION SIX
HUNDRED AND FIFTY -TWO THOUSANT SEVEN HUNDRED AND
FIFTEEN RAND AND SEVENTY CENTS) into the Plaintiff’s attorney’s
trust account.
The Plaintiff’s Attorney’s trust account details are as follows:
ACCOUNT HOLDER: VZLR INC
BRANCH ABSA BUSINESS BANK HILLCREST
BRANCH CODE: 6[…]
TYPE OF ACCOUNT: TRUST ACCOUNT
ACCOUNT NUMBER: 3[…]
1.4. In the event of default on the above payment, interest shall accrue on such
outstanding amount at 7% (at the mora rate of 3.5% above the repo rate on the
date of this order, as per the Prescribed Rate of Interest Act, 55 of 1975, as
amended) per annum calculated from due date, as per the Road Accident Fund
Act, until the date of payment;
1.5. The defendant is to request and load payment within 14 (fourteen) calendar
days from date of this order, with proof of same to be sent to the Plaintiff’s
attorneys within 5 (five) calendar days of doing same.
2.
2.1. The Defendant shall furnish the Plaintiff with an Undertaking, in terms of
Section 17(4)(a) of Act 56 of 1996, in respect of future accommodation of the
Plaintiff in a hospital or nursing home or treatment of or the rendering of a
service or supplying of goods of medical and non -medical nature to the
Plaintiff (and after the costs have been incurred and upon submission of proof
thereof) arising out of the injuries sustained in the collision which occurred on
31 January 2016.
3
2.2. If the Defendant fails to furnish the undertaking to the Plaintiff within
30 (thirty) days of this order, the Defendant shall be held liable for the payment
of the taxable party and party additional costs incurred in the Undertaking.
3.
The Defendant to pay the Plaintiff’s taxed or agreed party and party costs on the High
Court scale up to and including the trial dates of 11 and 12 May 2021 and the date
when this order is made an order of court, for the instructing and correspondent
attorneys, which costs shall include, but not be limited to the following:
3.1. All reserved costs to be unreserved;
3.2. The fees of Senior -Junior Counsel, including but not limited to the perusal,
consultations, preparation for trial; preparation, consideration, formulation and
drafting and completion of the “Heads of Argument” and/or “Submission for
Settlement document” accompanying this order; costs and day fees in respect
of the trial dates of 11 and 12 May 2021 of Senior-Junior Counsel;
3.3. The costs of obtaining all expert medico legal - and any other reports of an
expert nature which were furnished to the Defendant and/or its experts;
3.4. The costs of obtaining documentation / evidence, scans, considered by the
expert(s) to finalise their reports;
3.5. The reasonable taxable qualifying, preparation fees of all experts whose
report(s) were provided to the Defendant and / or its experts;
3.6. The reasonable costs of consultation fees between the Plaintiff’s experts and
the Plaintiff’s legal teams regarding the matter;
3.7. The reasonable cost of one consultation between the Plaintiff and the Plaintiff’s
legal team to consider the offer to settle;
3.8. The reasonable taxable reservation fees, as per the attached affidavit, of the
following experts:
− Dr LF Oelofse Orthopaedic Surgeon
− Hanri Meyer Occupational Therapist
(Rita van Biljon Occupational Therapists)
4
− Ben Moodie Industrial Psychologist
− Johan Sauer Actuary
3.9. The reasonable traveling and accommodation cost, incurred in transporting the
Plaintiff to all medico-legal appointments;
3.10. The reasonable cost for an interpreter’s attendance at the medico legal
appointments for translation of information;
3.11. The above -mentioned payment with regard to costs shall be subject to the
following conditions:
3.11.1. The Plaintiff shall, in the event that costs are not agreed, serve the notice
of taxation on the Defendant’s attorney of record; and
3.11.2. The Plaintiff shall allow the Defendant 14 (fourteen) calendar days to
make payment of the taxed costs;
3.11.3. The Defendant is to request and load payment within 14 (fourteen)
calendar days from date of settlement / taxation of the bill of cost, with
proof of same to be sent to the Plaintiff’s attorneys within 5 (five)
calendar days of doing same;
3.11.4. In the event of default on the above payment, interest shall accrue on
such outstanding amount at the mora rate of 3.5% above the repo rate on
the date of taxation / settlement of the bill of cost, as per the Prescribed
Rate of Interest Act, 55 of 1975, as amended, per annum, calculated
from due date until the date of payment.
By Order of the Court:
REGISTRAR
For the Plaintiff: VZLR Inc c/o Du Plooy Attorneys – 012 435 9444
Adv NJ Potgieter – 083 226 5198
VZLR reference: PM GRIMBEEK/MAT112740
5
For the Defendant: Maite E. Makola (RAF Claims Handler Menlyn)
012 429 5745
RAF Claim reference: 560/12385468/1034/2
Link: 4284914