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[2021] ZAGPPHC 162
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Khorommbi Mabuli Incorporated v Road Accident Fund and Others (6683/21) [2021] ZAGPPHC 162 (12 March 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER: 6683/21
REPORTABLE:YES
OF
INTEREST TO OTHER JUDGES:YES
REVISED
DATE:12
MARCH 2021
In
the matter between:
KHOROMMBI
MABULI INCORPORATED
APPLICANT
and
THE
ROAD ACCIDENT
FUND
FIRST RESPONDENT
COLLINS
PHUTJANE LETSOALO SECOND
RESPONDENT
SHOKENG
E
DLAMINI
THIRD RESPONDENT
JUDGMENT
TLHAPI
J
INTRODUCTION
[1]
This is an application launched by way of urgency, seeking orders
declaring the first
and second respondents to be in contempt of an
order of the full court of Justices Lamont, Ranchod and Kubushi dated
14 December
2020, and that the second respondent be committed to a
term of imprisonment for six months or, in the alternative a fine
and, for
costs on a punitive scale. The application is opposed and
the respondent raised a point
in limine,
being that of lack of
locus standi. No relief is sought against the third respondent.
[2]
The second respondent is the Chief Executive Officer of the first
respondent. It is
common knowledge that due to the precarious
financial position of first respondent, the Road Accident Fund (“the
RAF”),
it has been involved in ongoing litigation with some
members of the legal fraternity, in particular attorneys representing
members
of the public in claims against the RAF. One such matter is
an application in this court initiated by the first respondent, Road
Accident Fund vs The Legal Practice Council and Others case number
58145/ 2020. Some of the respondents in that matter are Sheriffs,
Absa bank and various attorneys, and as seen from the annexures
provided in the answering affidavit, the applicant is not one of
them. The purpose of the application (58145/2020) is an attempt by
the RAF to seek interim relief from the court, relating to the
attachments of its properties and bank accounts. In the application
it was stated that the attachments were not in the public interest
in
that there was the potential of impeding and paralyzing the RAF’s
day- to -day functions and execution of its mandate.
[3]
The applicant had been engaged in demanding payment from the first
respondent before
December 2020 and as stated by it, the purpose in
this application is “not to enforce monetary judgements but to
hold the
first and second respondents liable for their
mala
fide
contemptuous
conduct” of the court order of the December 2020 in 58145/2020
which reads as follows:
“
5.2
The Applicant will register court and settlement agreements on its
list of the payments
in order of the date that the court order was
granted or the written settlement was made;
5.3
The Applicant will take reasonable steps to ensure that the court
orders or written settlement
agreements for payment are registered on
the Applicant’s payment list within 30 days of receipt of the
court order or written
settlement agreement;
5.4
The Applicant will take reasonable steps to ensure that the court
orders or settlement agreements
that have not been captured on its
payment list will be captured on its payment list in historical
chronological order from the
date that order was granted by the court
or written settlement agreement was made;
5.5
The Applicant will provide all attorneys on its database of email
addresses of attorneys
involved in third party matters against the
Applicant with updated payment lists on a bimonthly basis from
January 2021 onwards;
5.6
The Applicant undertakes to make payment of the oldest claims first
by date of the court
order to the date of written settlement
agreement;
6.
The Applicant undertakes to make payment of the payment of the oldest
claims
first by date of the court order or date of written settlement
agreement.”
A copy of the court order
and the application was not annexed to the founding papers.
[4]
The applicant also alludes to another application, case number
52865/20 without giving
a full description of the parties, they are
(Road Accident Fund v Absa Band Ltd and Another case 52865/20), where
judgement was
given by Fourie J on 22 October 2020, concerning
payment delays by the RAF, and a possibility of a request being made
to extend
payment to a maximum of 180 days to satisfy court orders.
An amended notice of motion under case 58145/2020 (Road Accident Fund
vs Legal Practice Council and Others) was annexed, where the first
respondent was seeking to suspend all writs until 30 April 2021;
that
reasonable steps be taken to register court orders and settlement
agreements on its payment list within 30 days of their receipt;
that
reasonable steps be taken that all captured court orders and
settlements be captured in chronological historic order and that
attorneys on its data base be given information bi-monthly of updated
payment lists. This matter is scheduled for hearing by a
Full Court
on 15 March 2021.
[5]
I am also in receipt of a letter of complaint from the respondents’
attorneys,
regarding the filing afresh on case lines by the applicant
of its documents after judgement was reserved. The state of filing of
the applicants’ documents on case lines, the failure to annex
to the founding affidavit copies of the orders of court relied
upon
in this application, these were complained about by Mr Puckrin,
counsel for the respondent. Mr Lazarus attorney for the applicant
had
difficulty in referring the court to particular documents since he
was relying also on the numbering on the hard copies, which
were also
provided to me. I insisted upon using what was on case lines. Now,
after judgment was reserved, I caused the following
to be done:
(a)
As we all
recall, the applicant’s bundles, especially some of the
annexures were in very small font, documents had to be rotated,
some
were illegible. I instructed my clerk to request attorneys of the
applicant to attend to the proper filing of the documents
in its
bundles and to increase the font on case lines and that did not mean
to
introduce fresh documents.
Not
everything was corrected and I have not observed that anything has
changed in the documents previously filed or those of the
hard copies
in my possession.
(b)
I also
asked my clerk to request the respondents’ attorneys to ensure
that a signed copy of Mr Letsoalo’s affidavit
was filed on case
lines and that was done.
No
prejudice was suffered by the litigants.
BACKGROUND
[6]
The applicant commenced with the problems taken up with the first
respondent preceding
the order of 14 December 2020 in the application
of 58145/2020. According to the applicant the first respondent is
indebted to
forty- two (42) of its clients in respect of an amount of
R 11 732 441.82 which was due and payable. The debts had aged from at
least four months to more than a year from 22 October 2019. The
amount owing included capital and taxed bills of costs and in respect
of court orders and settlement agreements. Some of the court orders
were loaded into the payroll system for over a year as seen
in the
applicant’s spreadsheets annexed as “KM1 21” and
court orders marked “KM1 22”. No explanation
was
given for non-payment. The applicant contended that it was a matter
of public record that payments due to clients of other
legal firms
had been paid.
[7]
As a result, and commencing February 2020 the applicant caused to be
issued various
writs of execution against the first respondent’s
assets and or bank accounts, still no payments were forthcoming. On
17
September 2020 the applicant addressed a lengthy letter to the
first and second respondent seeking answers to what it perceived
as
reasonable suspicions of bias and malfeasance towards it, for issuing
warrant of executions against RAF. The applicant contended
that
non-payment compromised the client’s constitutional rights of
equality and the RAF’s obligation to discharge its
duty and
mandate without favour fear or prejudice. It was further contended
that in the discharge of its statutory duties, the
RAF had to be open
and transparent in its dealings with the public and a full disclosure
of its records were demanded. There was
no response to this letter
and to a follow up of 6 October 2020.
[8]
Consequently, after the court order of 14 December 2020 and, on 20
January 2021 the
applicant lodged a formal complaint under
1/25/2021/12117 regarding non-payments and, demanded payment on all
outstanding orders
which were then due and payable. There followed an
exchange of correspondence between the applicant and employees of the
first
respondent on 27 and 28 January 2020. In a further email after
the latter date, the applicant referred to the first respondent’s
disregard of the clauses 5.4, 5.5 and 6 of the order of court
which
ordered that payment of claims exceeding a 180 days, counting from
date of court order as opposed to the date of capture,
and a copy of
the court order was annexed for reference. The first respondent
replied as follows:
“
27
January 2021 T Madzihadila (first respondent): ……..
payment
in question was requested 03 December 2020 and will be considered for
payment when it reached +180 days dated from the date
of requested on
our system, depending on funds availability.
28
January 2021 (first respondent)…….
the complaints
department will attend to the complaints relating to the delays in
requesting payment. Please note that the treasury
is attending to the
requested payments in terms of their cash flow management plan.
Please see their statement regarding requested
payments/
……
there
are no definite payment commitment dates as the cash plan is managed
from month to month…….
The
principle of paying is as follows
(a)
matters will be paid on the 180+day terms and on T-status
(b)
subject to reconciliation & finalisation;
(c)
On availability of cash resources (fuel levy funds) and
(d)
starting
with the oldest matter first.”
[9]
The applicant was further informed that the first respondent would
endeavour to pay
on the 180+ days from date on which payment was
requested in the system and, not on date of settlement and that there
were no guarantees
that older claims would be paid first, it all
depended upon availability of cash and, the reconciliation of the
payment. The applicant
viewed the response as a flagrant disregard of
its complaint and as an imposition of a payment system that
disregarded the plight
of its clients and contemptuous conduct of an
order by Louw J of 9 December 2020.
[10]
Applicant addressed a letter on 1 February 2021 to officials of RAF,
Mr Regan Adams and Mr Eduard
Van Rooyen referring to the
1/25/2021/12117 complaint. The said officials were in charge of the
costs payment and capital payment
departments respectively at the
RAF. The applicants requested the capture of the long overdue
payments and gave an ultimatum to
the close of business on 3 February
2021, failing which a complaint would be referred to the CEO, Ms
Maria and Mr Walters to investigate
the official’s fitness to
hold their respective positions. The first respondent replied to the
letter on same date:
“
Good morning Mr
Khorommbi
The
contents of your email are noted in the earnest. Please note that the
RAF is indeed committed to assisting the claimants with
having their
settlements paid within a 180 days of settlement/court order, and on
the basis of the date on which settlement was
captured on the
system.”
Mr
E Van Rooyen replied:
Good
day,
Please
find herewith and updated in respect of capital matters contained in
your spread sheet;
Florence
Senoko obo minor 22/10/2019 R818 183. 20 Capital 3791087
requested
4/12/2019
Vhonani
Marcia Modau 07/02/2020 R3 100 045 capital requested
27/02/2020.”
The applicant contended
that Mr Adams communicated an injurious letter on
February
2021.
Good
day
The
above matter refers
Enclosed
with the updated spreadsheet.
Please
be advised that the region has been instructed to refer all bills for
your firm to our Forensics Investigation Department
and that we are
not to process any of your bills until we receive further
instructions. We trust that you find aforesaid in order.”
[11]
Mr Adams allegedly ordered his staff to stop processing all
applicant’s taxed bills and
cancelled all payments which were
requested in the applicant’s complaint. The applicant’s
updated spreadsheet reflected
that the applicant’s taxed orders
were referred for forensic investigation. On enquiries regarding this
step Mr Adams informed
the applicant that he received orders from Mr
Marius Werner of the first Respondent’s Forensic Department at
Menlyn. The
applicant made demand that the suspension of the
processing of his taxed bills be uplifted by no later than 5 February
2021 or
face litigation. Mr Adams undertook to take the matter up and
discuss the suspension with senior management.
[12]
Against this backdrop and from the various cases the first respondent
has initiated, the applicant
contended that the first respondent may
have been making payment for settlement of claims to others, whereas,
none of its claims
were paid for over a period of one
year.
The applicant contended that it had reason to believe that the first
respondent was involved in “dirty and selective
dealings”.
The applicant contended that the conduct of Messrs Adams and Van
Rooyen was wilful and designed to frustrate the
applicant and, the
first respondent had not refuted instructions to cease payment to the
applicant. Furthermore, intolerance was
demonstrated by the first
respondent against the “issuing of writs of execution by
certain claimants and legal firms, who
do not agree with the
selective and or slow pace of payment.” The applicant also
referred to the utterances of the second
respondent who described the
attachments as a “self-help approach”. The type of relief
sought by the first respondent
in cases numbers 58145/2020 which is
to be heard by the full court during March 2021 and that in 52865/20
dealt with by Fourie
J displays such intolerance and comments of the
respective Judges were referred to.
[13]
The applicant contended that the first respondent’s insistence
on its unlawful payment
methods despite legal processes and court
orders was illegal, and was driven by malice to unscrupulously avoid
legal obligations
conferred to it by judicial orders, as displayed by
the conduct of its officials, Messrs Adams and Van Rooyen who feared
escalation
of the applicant’s complaint to senior management.
The instruction by Mr Marius Werner to cease all payments of the
applicant’s
taxed bills to refer them to a forensic
investigation was unconstitutional. No reasons for such investigation
were given to the
applicant, and even if there was reason for such
investigation the first respondent had to treat such investigation
with urgency.
It was contended that the first respondent was
deliberately imposing its own payment regime despite court orders.
The applicant
contended that the second respondent’s mandate as
CEO of the first respondent was such that he could not plead
ignorance
of the payment system preferred by the first respondent, as
he was the deponent in the application on behalf of the first
respondent
as he had knowledge of the court order of 14 December
2020. Therefore, the non-processing and non-payment of the
applicant’s
taxed bills by the first respondent, could only
have occurred at the behest and instruction and or authority of the
second respondent
and, that their conduct was wilful and
mala
fide
.
[14]
The applicant contended that the application was urgent for the
following reasons:
(i)
The
outstanding capital payment was outstanding to the most vulnerable
members of society; the plight of the litigants which included
minors
and the elderly;
(ii)
The
applicant’s firm is being financially crippled by the failure
by the first respondent to pay;
(iii)
The experts
used in the matters are owed money and are now refusing to work with
the applicant’s firm notwithstanding contingency
fee
agreements;
(iv)
The
flagrant disregard by the first respondent of orders of court;
(v)
The
applicant cannot obtain substantial redress at a hearing in due
course;
[15]
The second respondent deposed to the answering affidavit and raised
points
in limine, b
eing, the alleged abuse of process, lack of
locus standi
and lack of urgency. In as far as the lack of
locus standi
was concerned he contended that the applicant
does not rely on any order granted in its favour; the application
should have been
brought by the judgement creditor and not the
applicant as, it was not the judgement creditor in whose name and
favour all the
orders relied upon were made.
[16]
The second respondent bemoans the manner of service of the
application at his residence and on
his wife, which he viewed as an
infringement to the right of privacy and dignity of his family and an
attempt to pressure him to
make preferential payment to the
applicant.
[17]
It was contended that the application was based on ‘conjecture
and defamatory statements,’
and that applicant had failed to
prove the essential elements for the relief sought. Furthermore, that
the application was based
on ‘vexatious, frivolous and
scandalous’ attacks against the respondents, especially the
second respondent in his personal
capacity. It was contended that the
applicant had failed to attach the first respondent’s founding
and replying affidavits
in case number 58145/2020 which shows that
the first respondent was in a parlous financial state, unable to make
payment of claims
by way of lump sum. The first respondent was daily
inundated by letters, emails requesting payment. In an attempt to
deal with
the issue, a system was introduced to stagger payment after
the lapse of 180 days from the date of a court order or date of
settlement.
[18]
The second respondent contended that subject to available funds the
first respondent is abiding
the court order by prioritizing capital
claims above claims for legal costs and by paying the oldest claims
first. There were a
few exceptions, that is, where a firm of
attorneys was under investigation for impropriety. It was contended
that the first respondent’s
employees had incorrectly stated in
their emails that the dates of the claims were determined only when
captured because this referred
to the old system. The second
respondent denied that there was an obstruction and a deliberate and
malicious intent in the payment
process. Payment to applicant had
been suspended pending the outcome of an investigation into suspicion
of impropriety relating
to the applicant’s bills of cost and
possible duplications of payment of claims.
[19]
The first respondent had uncovered a substantial amount in duplicate
payments arising from the
manner of payments to attorneys, which
payments were made as a result of bank attachments and payments to
attorneys directly on
same matters. This required a reconciliation of
payments to be done manually, which was time consuming with limited
capacity. A
verification process entails the creation of a duplicate
register which is forwarded to the bank for confirmation and, a
recovery
instruction form is forwarded to the Debtors Department to
initiate recovery.
[20]
The first respondent contended that undertaking the investigative
process was an exercise in
fulfilling its statutory obligations and
that the following provisions were applicable:
(i)
section
1(v) of PAJA;
(ii)
(ii)
section 27 (2) of the Constitution, 1996;
(iii)
(iii)
section 4 of the Road;
(iv)
Accident
Fund Act.
The
first respondent states that the process engaged was endorsed in the
recent
judgment
of Collis J in J Koekemoer and 353 Others v Road Accident Fund Case
64143/2020
(22 January 2021).
[21]
The first respondent contended that payment to the claimants in this
application was suspended
pending the outcome of the
investigations and possible claims against the applicant. The first
respondent undertakes to complete
its internal provisional
investigation by May 2021 and that it will provide the applicant with
its provisional report within 14
days of completion thereof. This
undertaking is provisional on the applicant giving its full
cooperation.
[22]
The respondents apply for punitive costs against the applicant whom
it contended was not competent
to bring the application, there being
no basis to approach the court by way of urgency and thereby
incurring unnecessary costs
for the respondents.
SERVICE
OF THE APPLICATION ON THE SECOND RESPONDENT
[23]
I know that Judges in the urgent court, with certain exceptions would
always insist upon service
on the other party. This application
calls for the committal to prison of the second respondent,
alternatively imposition
of a fine. When I noted that the first and
second respondent’s answering affidavit had been filed on case
lines and, that
I had received a request to place the matter on the
roll for either the 23 or 24 of February 2021, in order to
accommodate Advocate
Puckrin SC. I was confident that Mr Letsoalo,
the second respondent, Chief Executive Officer of the first
respondent had been notified
of the
application
and that he had the opportunity to place his version before the
court.
[24]
I am therefore not inclined to comment on his complaint of how the
applicant and Sheriff went
about serving at his place of residence;
unlawful entry into his residential estate by the Sheriff; harassment
to his wife and
infringement of his family’s right to privacy
and dignity or, the allegation that the application was to place
unlawful pressure
on the first respondent for preferential payment.
While he might have a right to bring this issue up, I view his
complaint as trivial,
not worthy of attention as compared to the
circumstances and the problems the RAF is presently encountering.
Therefore, the prejudice
to third parties as a result of the parlous
financial state of the RAF and, the attempts to alleviate and to
correct this sorry
state of affairs should be given priority.
LOCUS
STANDI
[25]
Having said the above, it is common knowledge that amidst its parlous
financial state, the RAF
has been beleaguered by demands for payment
made on behalf of claimants and payment of bills of costs; a
situation has arisen where
experts have not been paid and are
threatening not to render any services to assess and give reports in
respect of injuries sustained
by claimants in motor vehicle
collisions; there are attorneys and advocates who complain that their
practices are almost in ruins.
In this matter it is alleged that the
first respondent is indebted to the applicant’s forty-two
clients in the amount R11
732 441.82,which amounts are now due and
payable. Although it is not payment that the applicant seeks to
enforce, the claims
had aged from at least four months to almost one
and a half years and most importantly, the first respondent and
second respondent
have not complied with the order of 14 December
2020, which it is alleged they disregard with impunity.
[26]
As I see it, on a strict interpretation of the Powers of Attorney
annexed to the papers, and
without analysing the entire content of
the document, I find that the powers do not extend to authorizing the
applicant to launch
contempt proceedings against the first and second
respondents. The personal details of and amounts due to the judgement
creditors
were available to the applicant at all times. It is the
judgement creditors who have a direct and substantial interest,
especially
where it is alleged that the first respondent has not
complied with an order, which directs that court orders and
settlement agreements
in their favour as judgment creditors be
registered for payment, especially the long outstanding ones that are
180 days or older.
[27]
The importance of the judgment creditor’s substantial interest
is demonstrated in J Koekemoer
and 353 Others
supra.
The
applicants consisted of judgment creditors and the 354
th
applicant was their attorney of record, who probably had a similar
Power of Attorney
referred
to in this matter. In my view, the importance of the judgment
creditors bringing the application against RAF in their personal
capacities, is their entitlement or right to prompt direct payment
within the period prescribed in the
Road Accident Fund Act 56 of
1996
. In the Koekemoer matter the RAF was able to convince the court
to allow for a period of investigation to precede payment to the
claimants. Albeit in my view, as probably is the case in this
application this process of investigation had the potential of
prejudice,
to those claimants who were not tainted by fraud or
duplicate payments and further prejudice in that a system of payment
which
has no legality presently is being foisted upon them.
[28]
Again, in the matter of RAF v ABSA Bank Limited and Another case
number 52865/202, Fourie J considered
the issue of non-joinder of the
third parties in particular, the claimants. The court found that the
applicant was aware of the
joinder requirement but, had conveniently
opted not to comply with it. The court was not in favour of granting
a rule nisi to have
this lacuna fulfilled because there was more at
stake to the prejudice of the claimants. Opportunity was given to the
RAF, to launch
a fresh application and to cite third parties who
would be affected by the order.
[29]
According to Mr Lazarus the applicants had demonstrated that they had
a substantial interest
in the order, hence the launch of the
application on behalf of their clients. I do not find that such
direct and substantial interest,
in their capacity as attorneys for
the judgement creditors had been established or properly articulated.
Alternatively, a further
complication is that no confirmatory
affidavits from the judgement creditors have been obtained and
annexed to the papers. In as
much as I would have wanted to deal with
the entire application, however, having come to this conclusion I
find that it is no longer
necessary to deal with the issue of
contempt of the order of 14 December 2020, as doing so would render
the exercise superfluous
and of no consequence. I rely on what was
stated in Four Wheel Drive Accessory Distributors CC v Leshni Rattan
N.O 2019(3) SA 451
(SCA) where the following was stated at paragraph
19:
“
The
court a quo was thus correct in holding that the plaintiff did not
prove that it bore any risk in respect of the Discovery.
It did not
prove an interest in the litigation and consequently, failed to
establish
locus
standi.
The
court also rightly found that no contract came into being because
there was no consensus regarding the terms (and nature) of
the
agreement. That should have been the end of the matter. Indeed, the
court held that the failure to prove
locus
standi
was
dispositive of the entire action.”
[30]
Mr Puckrin submitted that in the event of a dismissal, costs on a
punitive scale be awarded,
I am no inclined to do so.
[31]
In the result the following order is granted.
1.
The
application is dismissed with costs including costs of senior
counsel.
___________
TLHAPI
VV
(JUDGE
OF THE HIGH COURT)
MATTER
HEARD ON
: 24 & 25
FEBRUARY 2021
JUDGMENT
RESERVED ON
: 25
FEBRUARY 2021
ATTORNEYS
FOR THE APPLICANTS :
SHAPIRO LEDWABA INC.
ATTORNEYS
FOR THE RESPONDENTS :
ROAD ACCIDENT
FUND