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[2021] ZAGPPHC 345
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Road Accident Fund v Applegate and Others (52500/2015) [2021] ZAGPPHC 345 (27 May 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
nr. 52500/ 2015
REPORTABLE
OF
INTEREST TO OTHERS JUDGES
REVISED
In
the matter between:
ROAD
ACCIDENT FUND
Applicant/Defendant
And
OLIVE
BRENDAN APPLEGATE
First
Respondent/First Plaintiff
JOANNE
HOWARD SWICK
Second
Respondent/Second Plaintiff
THE
DEPUTY – SHERIFF OF PRETORIA EAST
Third
Respondent
In
re
In
the matter between:
OLIVE
BRENDAN APPLEGATE
First Plaintiff / Applicant
JOANNE
HOWARD SWICK
Second
Plaintiff / Applicant
And
THE
ROAD ACCIDENT FUND
Defendant / Respondent
JUDGMENT
BARNARDT
AJ
1.
This is an application by the Road Accident Fund for the rescission
alternatively variation of an order for interim payment granted in
terms of Rule 34A by Sardiwalla AJ on 7 August 2017, on the
basis
that the order was granted erroneously and incorrect.
2.
I will refer to the parties as referred to in the main action, the
applicant
in casu
to be the defendant and the first and second
respondents to be the first and second plaintiffs.
FACTUAL
BACKGROUND
3.
The first and second plaintiffs were involved in a motor vehicle
accident on 16 September 2013, and they issued summons against the
applicant on 7 August 2015.The merits of their claims were conceded
on 12 April 2016 and a letter of demand, with all the medical expense
vouchers, was forwarded to the defendant on 5 October 2016.
4.
On 20 October 2016, a Rule 34A application for interim payment, was
issued against the defendant who filed a notice of intention to
oppose the application on 12 February 2017. On 20 February 2017,
Mokoena AJ granted an order, compelling
inter alia
the
defendant to file its answering affidavit on or before 24 February
2017 and the application was provisionally postponed to
the opposed
motion roll of 7 August 2017.
5.
The defendant failed to file its opposing affidavit and on 7 August
2017 Sardiwalla AJ granted the following order:
“
HAVING
been addressed by Counsel, having read the documents filed of record
and having considered the matter.
IT IS ORDERED THAT
1.
The
Respondent
is ordered to
make
an
interim
payment
in the sum
of
R346
436.34
and
$505
779.98
in
respect
of
the
First
Applicant's
past
medical expenses;
and
2.
The
Respondent
is
ordered
to
make
an interim payment
in the sum of R349
306.35
in
respect
of
the
Second
Applicant's past
medical expenses; and
3.
The Respondent is ordered to pay the cost of this application.”
6.
I pose here to mention that adv. Kgomongwe, on behalf of the
defendant
in his heads of argument referred to a condonation
application for the late filing of the defendant’s opposing
affidavit
in the rule 34A application, which was dismissed and
resulted in the application to be disposed of unopposed. However,
despite
an invitation, during argument, to refer me to the opposing
affidavit and condonation application, or to file them even at this
late stage, he was unable to do so.
7.
In the light of his failure to provide the affidavit and condonation
application referred to, the fact that his opponent, adv Roestorf
denied that there was a condonation application and especially
the
fact that no mention of the dismissal of a condonation application is
evident from the order granted by Sardiwalla AJ, I accept
that the
defendant did not file an opposing affidavit and did not bring a
condonation application.
8.
The defendant, on its own version, tried for the first time in
October
2019, 26 months after the order was granted by Sardiwalla AJ,
to resolve the ‘issue’ of the interim payment with the
plaintiffs’ attorneys of record. No settlement could be reached
and this application for the rescission or variation of the
order on
7 August 2017 was issued on 13 December 2019.
9.
The defendant made the following offer in a letter dated 13 December
2019, being 26 months after the order was granted.
“
6.
We are of the view that your clients are only entitled to the amounts
in
the offer insofar as medical expenses are concerned, but to show
the Fund’s bona fides in this regard, the Fund is willing
to
pay into your trust account, in an interest-bearing account, to the
benefit of the successful party in this dispute, the amounts
as
ordered by the court to be paid. This payment is subject to the
following:
6.1
That you agree to the rescission of the judgment and give a written
undertaking,
not to pay out this money which is in trust, until the
dispute is resolved between the parties as to what the entitlement of
your
clients are in respect of past medical expenses upon proof
thereof.
6.2
That you will pay back the amount to the fund, which is found by the
Court,
or by agreement between the parties, that your clients are not
entitled to, within 7 days
from the finalisation
of the dispute relating to the past medical expenses;”
10.
The rescission application was opposed and because the plaintiffs’
answering
affidavit was filed late, a formal condonation application,
which was opposed by the defendant, had to be brought. This
application
was considered and granted by Rabie J on 16 November
2020.
RELIEF
CLAIMED
11.
As indicated above, the defendant in its notice of motion, applied
for the rescission
of the interim order “on the basis that the
order was granted erroneously and incorrect”, according to the
heading
of its founding affidavit “in terms of Rule 42 and the
Common Law” and according to the purpose of the application,
“to ‘correct’ an obviously wrong judgment or order
based on incorrect evidence put before court”.
12.
On behalf of the defendant it was alleged that the vouchers for past
medical
expenses, submitted by the plaintiffs in the Rule 34A
application, included non-substantiated and factually incorrect
vouchers
and therefore this court was requested to “exercise
its general discretionary power to correct an error in its judgment
or
order.”.
13.
The defendant, in passing, indicated that it always has,”
endeavored to
settle this issue and has never shield away from
accepting liability for past medical expenses, but it has to
intervene now, notwithstanding
the Court order, in this matter, in
the interest of justice and to protect public funds.”
14.
The defendant did not apply for condonation for the late bringing of
the rescission
application, did not address its failure to file its
opposing affidavit to the Rule 34A application or provide any reasons
for
bringing this application 28 months after the order was granted
on 7 August 2017. It also opted not to file a replying
affidavit
after receipt of the plaintiffs’ answering affidavit.
RECISSION
IN TERMS OF RULE 42
15.
Rule 42(1)(a) of the Uniform Rules of Court provide for the
rescission and or
variation of an order or judgment erroneously
sought or erroneously granted in the absence of any party affected
thereby.
An order is erroneously granted if it was
legally incompetent for the court to have made such an order, if
there was an irregularity
in the proceedings or if the court was
unaware of facts, if known to it, would have precluded it from a
procedural point of view
from making the order.
16.
A judgment to which a party is procedurally entitled cannot be
considered to
have been granted erroneously within the meaning of
this subrule by reason of facts of which the court was unaware at the
time
of granting the judgment. As found by Streicher JA in
Lodhi
2 Properties Investments CC and Another v Bondev Developments (Pty)
Ltd
[1]
“
.
. . A court which grants a judgment by default like the judgments we
are presently concerned with, does not grant the judgment
on the
basis that the defendant does not have a defence: it grants the
judgment on the basis that the defendant has been notified
of the
plaintiff’s claim as required by the Rules, that the defendant,
not having given notice of an intention to defend,
is not defending
the matter and that the plaintiff is in terms of the Rules entitled
to the order sought. The existence or non-existence
of a defence or a
defence on the merits is an irrelevant consideration and, if
subsequently disclosed, cannot transform a validly
obtained judgment
into an erroneous judgment.”
17.
On behalf of the defendant, reliance was placed on the judgment of
Makgoka AJ
in the matter of
Dlamini
Construction (Pty) Ltd v Future Logistical Solutions CC
[2]
where
it was found that the applicant established sufficient cause to
rescind the summary judgment. The rescission order in the
Dlamini-judgment was however granted in terms of the common law and
not in terms of Rule 42(1)(a). Makgoka AJ specifically concluded
that
the summary judgment was not granted erroneously, and that the
application cannot be brought in terms of Rule 42(1)(a).
18.
The defendant also referred to
Rossitter
& Others v Nedbank
[3]
as
authority that it did not have to show good cause to have an
erroneously granted order rescinded, but this is only the position
if
the order was in fact erroneously granted.
19.
The defendant
in
casu
did
not pursue its opposition to the Rule 34A application or timeously
raised any defences or objections to the application and
therefore it
cannot argue that the order was erroneously granted merely because it
has a possible defence.
20
I therefore find that the order granted by Sardiwalla J was not
erroneously
granted and that a rescission application in terms of
Rule 42(1)(a) cannot be successful.
21.
Although, the only indication that the defendant is bringing the
rescission
or variation application in terms of the common law is to
be found in the heading of its founding affidavit, I will briefly
consider
the requirements thereof.
RESCISSION
AT COMMON LAW
22.
A judgment can be set aside in terms of the common law on the
following grounds:
Fraud,
justus
error
, in certain exceptional
circumstances when new documents have been discovered, where judgment
had been granted by default, and
in the absence between the parties
of a valid agreement to support the judgment, on the grounds of
justa
cause
.
23.
It is assumed that the defendant based his application for rescission
at common
law on the allegation that this court must ‘correct’
an obviously wrong judgment or order based on incorrect evidence
put
before court, and that the plaintiffs, by implication committed fraud
or was a party to a non-fraudulent misrepresentation.
24.
In
Rosen
and Another v Focus Genius (Pty) Ltd
[4]
it
was held that,
“
[33] In
order to succeed on a claim that a judgment be set aside on the
ground of fraud, it is thus necessary for the Applicants
to allege
and prove the following
33.1. That
the successful litigant was a party to the fraud;
33.2. That
the evidence was in fact incorrect;
33.3. That
it was made fraudulently and with intent to mislead; and
33.4. That
it diverged to such an extent from the true facts which had been
placed before the Court, that the Court would have
given a judgment
other than that which it was induced by the incorrect evidence to
give.
33.5. It
must be alleged and proved that, but for the fraud, the Court would
not have granted the judgment.”
The
defendant
in
casu
did
not allege or prove any of the above in its founding affidavit.
25.
A rescission application at common law is expected to show ‘good
cause’
for the rescission which includes a) giving a reasonable
explanation for the default; b) showing that the application was made
bona fide; and c) showing that a
bona
fide
defence, which have
prima
facie
prospects of success, exists.
26.
In matters of this nature, the terms “
sufficient
cause
”
and “
good
cause
”,
are almost identical or used interchangeably. In
Vilvanathan
and Another v Louw NO
[5]
,
it was held that:
“
The
Appellate Division and the Supreme Court of Appeal have laid down
that at common law ‘it is clear that in principle and
in the
long-standing practice of our courts’ that there are two
‘essential elements of “sufficient cause”
for
rescission of a judgment by default’.
These
are –
(i) that
the party seeking relief must present a reasonable and acceptable
explanation for his default; and
(ii) that
on the merits (i.e. of the action) such party has a bona fide defence
which, prima facie, carries some prospect of
success.
Both
these elements must be present.
”
27.
As indicated above, the defendant,
in
casu,
did not provide any explanation
for its default to file its answering affidavit in the rule 34A
application, nor any explanation
for its failure to bring this
rescission application 28 months after the order was granted on 7
August 2017.
28.
The defendant was aware of the Rule 34A application, since it filed a
notice
of intention to oppose, and was granted an opportunity by
Mokoena AJ on 20 February 2017 to file its answering affidavit but
remained
in default and provided no explanation for this failure.
29.
The defendant also
did not provide an explanation for the period from August 2017 until
October 2019 when Mr Fourie visited the
offices of the plaintiffs’’
attorneys of record to discuss the judgment during round-table
discussions. The court is
left with no explanation for the default,
and I am unable to find in the founding affidavit, or elsewhere, any
reasonable or satisfactory
explanation of the defendant’s
default and failure to file its answering affidavit and its failure
to bring this application
timeously. Which causes me to consider
whether the defendant’s default was wilful or not.
30.
In
Colyn
v Tiger food Industries t/a meadow Feed Mills (Cape)
[6]
the following was said about wilful default.
“
(a)
He (ie the applicant) must give a reasonable explanation of
his default.
If it appears that his default was wilful or
that it was due to gross negligence the Court should not
come
to his assistance.”
31.
While wilful default on the
part of the defendant is not a substantive or compulsory ground for
refusal of an application
for rescission, the reasons for the default
remain an essential ingredient of the good cause to be shown and the
wilful or negligent
nature of the defendant's default is one of the
considerations which the court considers in the exercise of its
discretion to determine
whether good cause is shown.
32.
In
Silber
v Ozen Wholesalers (Pty) Ltd
[7]
,
it has been held that the explanation for the default must be
sufficiently full to enable the court to understand how it really
came about, and to assess the applicant's conduct and motives.
33.
Before a person can be said to be in wilful
default, the following
elements must be shown:
i.
knowledge that the action is being brought against him;
ii.
a deliberate refraining from entering appearance, though free to
do
so; and
iii.
a certain mental attitude towards the consequences of the default.
34.
In
Markel
v Absa Bank Bpk
[8]
it was concluded that the true test is whether the default was a
deliberate one,
ie
when a defendant with full knowledge of the circumstances and of the
risks attendant on his default freely takes a decision to
refrain
from taking action.
35.
Apart from the defendants’ failure to attend to the Rule 34A
application,
its disregard for its responsibilities towards the
public and especially claimants should also be considered.
36. The
merits of the plaintiffs’ claims in the main action were
already conceded in April 2016 and it must be accepted
that the
defendant has considered the matter prior to conceding merits and
would have anticipated the plaintiffs’ claims
for quantum,
including their claims for past medical expenses. On behalf of the
plaintiffs a request for an interim payment was
forwarded to the
defendant on 28 July 2016 with no response from the defendant.
37.
Even if it is accepted that the defendant
was
only since 5 October 2016, when the letter of demand was forwarded to
it, aware of the plaintiffs’ claim for past medical
expenses,
it opted not to take this court in its confidence by revealing any
steps taken to clarify the concerns it had with the
past medical
expenses of the plaintiffs.
38.
It must be deduced, from the bill reviews by Ms Makgobane Welheminah
Kolokoto,
attached to the defendant’s founding affidavit, that
she considered the second plaintiff’s claim for the first time
on 25 October 2018 and the second report regarding the first
plaintiff’s claim was done on 3 October 2019, without any
explanation
or correspondence to show that these claims received any
attention when they were submitted in 2016.
39.
In the light of all the circumstances
in
casu
, and
absent an explanation to the contrary, I am of the view that the
defendant was in wilful default.
40.
However, in
Nedbank
Limited v Sipho Albert Mziako
[9]
the Court said:
“
In
deciding whether the reason for the default is reasonable and
acceptable the courts usually have regard to whether the applicant
was in wilful default or not. Wilful or gross negligence does not
necessarily constitute an absolute bar to the grant of rescission;
it
should rather be a factor, albeit a weighty one, to be taken into
account, together with the merits of the defence raised to
the
plaintiff’s claim in determining whether sufficient cause for
rescission had been shown.”
Therefore,
the defence raised by the applicant must also be considered.
41.
It is trite law that an applicant in an application for rescission of
judgment
need only make out a prima facie defence in the sense of
setting out averments which, if established at trial, would entitle
her
or him to the relief asked for. Such an applicant need not deal
fully with the merits of the case and produce evidence that shows
that the probabilities are in its favour.
42.
According to the defence now raised, the amounts claimed in the
vouchers which
were already submitted to it in October 2016, were
non-substantiated and factually incorrect. In this regard the
defendant relies
on the affidavit of Ms Makgobane Welheminah
Kolokoto, a medical assessor employed by the defendant who made
general allegations.
43.
It is evident from her affidavit that the defence raised by the
defendant is
at best a provisional defence.
“
The
Respondents are only entitled,
at this
stage
, to the amounts in my report,
which the Fund, I am advised, tendered.
The
Respondent
should
prove the additional amounts
supported by proper substantiating documents and evidence, as the
fund is not at liberty and in a position to offer anything more.
The claims respectfully
seem
to be excessive
,
not corroborated and do not pass the scrutiny of the medical
department of the Fund.” (my underlining)
44.
Considering the provisional, general allegations raised as a defence
in circumstances
where that defendant had ample time to establish
whether the vouchers claimed were in fact incorrect, I am not
convinced that the
defendant has a
bona
fide
defence
which,
prima
facie,
carries some prospect of
success.
45.
However, even if the defence raised could be regarded as
prima
facie
with
some prospects of success, the flagrant disregard by the defendant of
the rules, worsened by its failure to tender any explanation
compels
me to refuse the rescission or variation application.
46.
In
the matter of
Grootboom
v National Prosecuting Authority and Another
[10]
the Constitutional Court
held as follows:
“
23.
It is now trite that condonation cannot be had for the mere asking. A
party seeking condonation must make out a case entitling
it to the
court’s indulgence. It must show sufficient cause. This
requires a party to give a full explanation for the non-compliance
with the rules or court’s directions. Of great significance,
the explanation must be reasonable enough to excuse the default.
50.
In this Court the test for determining whether condonation should be
granted or refused is the interests of justice. If it is
in the
interests of justice that condonation be granted, it will be granted.
If it is not in the interests of justice to do so,
it will not be
granted. The factors that are taken into account in that inquiry
include:
(a)
the length of the delay;
(b)
the explanation for, or cause for, the delay;
(c)
the prospects of success for the party seeking condonation;
(d)
the importance of the issue(s) that the matter raises;
(e)
the prejudice to the other party or parties; and
(f)
the effect of the delay on the administration of justice.
Although
the existence of the prospects of success in favour of the party
seeking condonation is not decisive, it is an important
factor in
favour of granting condonation.
51.The
interests of justice must be determined with reference to all
relevant factors. However, some of the factors may justifiably
be
left out of consideration in certain circumstances.
For
example, where the delay is unacceptably excessive and there is no
explanation for the delay, there may be no need to consider
the
prospects of success. If the period of delay is short and there is an
unsatisfactory explanation but there are reasonable prospects
of
success, condonation should be granted. However, despite the presence
of reasonable prospects of success, condonation may be
refused where
the delay is excessive, the explanation is non-existent and granting
condonation would prejudice the other party
.
As a general proposition the various factors are not individually
decisive but should all be taken into account to arrive at a
conclusion as to what is in the interests of justice.”
47.
See also the comments by Opperman J in the
Rosen
and Another v Focus Genius (Pty) Ltd.
[11]
“
[24] As
I understand the principles to be extracted from these dicta, the
fundamental rule remains that an unsatisfactory explanation
for the
applicant’s default cannot be cured by, or be approached more
leniently, because she is able to show good prospects
of success on
the merits. An applicant cannot escape the obligation to
provide a satisfactory explanation for her default
and rely instead
on her prospects of success. The prospects of success will only tip
the scales if there is an explanation that
meets some basic threshold
of acceptability, and the circumstances are such that the doubts that
the court has over the sufficiency
of the explanation are outweighed
by the applicant’s strong prospects of success.”
47.
Considering all circumstances in casu, I conclude that the defendant
is not
entitled to a rescission or variation of the order of 7 August
2017 at the common law.
PROTECTION
OF PUBLIC FUNDS
48.
Adv Kgomongwe, on behalf of the defendant, for the first-time during
address,
argued that this court has a duty to protect public funds
and should therefore grant rescission even though the defendant has
failed
to meet the requirements for rescission in terms of Rule
42(1)(a) or common law.
49.
He referred this court to the judgement by Weiner AJA in
PM
obo TM v Road Accident Fund
[12]
with reference to the duty of courts in respect of public
funds.
“
[34]
The RAF is an organ of state, established in terms of s 2 of the Road
Accident Fund Act 56 of 1996 (the Act). It is thus
bound to adhere to
the
basic values
and principles governing the public administration under our
Constitution. Section 195(1) requires, inter alia, that
‘[a]
high standard of professional ethics must be promoted and
maintained’; and that ‘[e]fficient, economic and
effective use of resources must be promoted’
[35]
In cases involving the disbursement of public funds, judicial
scrutiny may be essential. A judge is enjoined to act in terms
of s
173 of the Constitution to ensure that there is no abuse of process.
Judges in all divisions have expressed concern that in
many RAF
cases, there is an abuse of process. Settlements are concluded where,
for example, the substantial damages agreed to bear
no relation to
the injuries sustained.”
50.
I agree that courts have a duty to protect public funds, but any
reliance hereon
in casu
is misplaced. The defendant,
being a public entity, failed blatantly to promote and maintain a
high standard of professional
ethics and efficient economic and
effective use of resources and is the author of its own problems.
To expect of this court
to disregard the rules of law and legal
principles, merely to assist the defendant “to protect public
funds” will be
an abuse of process and cannot be justified.
51.
Cognisance should also be taken of the fact that in terms of Subrule
10 of Rule
34A a court may, in granting a final order, order
repayment of the interim payment or part thereof. It is
therefore clear
that the defendant still can convince the trial court
of its allegations that the vouchers are incorrect and or
unsubstantiated.
COSTS
52.
On behalf of the plaintiffs I was requested to grant a punitive cost
order against
the defendant. It is an accepted legal principle that
costs ordinarily follow the result and a successful party is
therefore entitled
to his or her costs.
53.
The general rule is that costs follow the event, which is a starting
point.
The guiding principle is that costs are awarded to a
successful party to indemnify him for the expense to which he has
been put
through having been unjustly compelled either to initiate or
to defend litigation.
54.
In
Nel,
Appellant v Waterberg Landbouwerkers Kooperatiewe Vereniging
Respondent
[13]
,
the following was stated in relation to costs on an attorney
and client scale:
‘
The
true explanation of awards of attorney and client costs not expressly
authorised
by Statute seems to be that, by
reason of special considerations arising either from the
circumstances which give rise to the action
from the conduct of the
losing party, the court, in a particular case considers it just, by
means of such an order, to ensure more
effectually that it can do by
means of a judgment for party and party costs that the successful
party will not be out of pocket
in respect of the expenses caused to
him by the litigation.”
55.
It is also an accepted legal principle that cost is in the discretion
of the
court. The basic rules were stated as follows by the
Constitutional Court in
Ferreira
v Levin NO and Others
[14]
:
“
The
Supreme Court has, over the years, developed a flexible approach to
costs which proceeds from two basic principles, the first
being that
the award of costs, unless expressly otherwise enacted, is in the
discretion of the presiding judicial officer, and
the second that the
successful party should, as a general rule, have his or her costs.
Even this second principle is subject to
the first.”
56.
I considered granting a punitive cost award in favour of the
plaintiffs,
given the history of the delays occasioned by defendant
in this matter. However, in the exercise of my judicial
discretion,
I am not inclined to make a punitive cost order as
requested by plaintiffs.
ORDER
1.
The application for rescission of the order by Sardiwalla AJ on 7
August 2017 is dismissed
2.
The applicant/ defendant is ordered to pay the costs of the
application.
ACTING
JUDGE JF BARNARDT
JUDGE OF THE HIGH
COURT
GAUTENG
DIVISION OF THE HIGH COURT, PRETORIA
Delivered:
This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation
to the
Parties/their legal representatives by email and by uploading it to
the electronic file of this matter on CaseLines.
The date for
hand-down is deemed to be 27 May 2021.
APPEARANCES
For
the applicant: Adv.
M Kgomongwe
Instructed
by:
Sekati-Sekati Inc.
For
the respondents: Adv
AC Roestorf
Instructed
by:
Malcolm Lyons & Brivik Inc
Date
of hearing:
8
March 2021
Date
of Judgement: 27
May 2021
[1]
2007 (6) SA 87
(SCA) - paragraph 27
[2]
Saflii (21429/2006)
[2007] ZAGPHC 211
(14 September 2007)
[3]
Saflii (96/20140
[2015] ZASCA 196
(1 December 2015)
[4]
(38436/2012) [2017] ZAGPPHC 304 (11 May 2017)
[5]
2010
(5) SA 17
(SCA)
[6]
2003 (6) SA 1
SCA at 9f
[7]
1954
(2) SA 345
(A)
at 353A.
[8]
1996
(1) SA 899
(C)
at 905C-D
[9]
(1010/09)
[2010]
ZANWHC 45
(28
December 2010)
[10]
(2014)
1 BLLR 1 (CC).
[11]
See Footnote 4 supra
[12]
Saflii
91175/20170[2019] ZASCA 97 (18 Junie 2010); 2019 (5) SA 407 (SCA)
[13]
1946 AD 597
at 608
[14]
[1996]
ZACC 27
;
1996
(2) SA 621
(CC)
at 624B—C (par [3]).