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[2020] ZALMPPHC 78
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Phadu v Road Accident Fund (LP/PLK/RC84/2017; HCA15/2019) [2020] ZALMPPHC 78 (21 September 2020)
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IN THE HIGH COURT OF SOUTH
AFRICA
LIMPOPO DIVISION, POLOKWANE
(1)
REPORTABLE:
NO/
YES
(2)
OF INTEREST TO OTHER JUDGES:
NO/
YES
(3)
REVISED.
COURT
A QUO
CASE
NO: LP/PLK/RC84/2017
APPEAL
CASE NO: HCA15/2019
In
the matter between:
MAKOENA
JOHANNA PHADU
APPELLANT
And
ROAD ACCIDENT
FUND
RESPONDENT
JUDGMENT
NAUDE AJ:
[1]
This
is an appeal from the Regional Court Polokwane against the judgment
and order of Magistrate J.T Ngobeni delivered on 17 August
2018.
[2] The
Appellant in this matter was the Plaintiff in the Court a
quo
and the Respondent herein was the
Defendant. The parties herein are referred to as in the
court
a
quo
in order to maintain harmony with
the record before this court.
Facts:
[3]
On
or about 4 March 2016 at or near Matlala Road, Polokwane. a motor
vehicle collision occurred wherein a motor vehicle with registration
number [….], driven by Alpheus Boysie Molotsana experienced a
tyre puncture and overturned. Eliphus Malesela Phady ("the
deceased") was conveyed in the motor vehicle. The deceased
sustained multiple injuries from which he ultimately passed away.
The
deceased was married to the Plaintiff in community of property and
was the father of a minor child born on 2 August 2002.
[4] The
Plaintiff instituted action proceedings in the Regional Court
Polokwane wherein
she claimed maintenance for herself in the amount
of R146527-00 (One Hundred Forty Six Thousand Five Hundred Twenty
Seven Rand)
and maintenance for th minor child in the amount of R48
135-00 (Forty Eight Thousand One Hundred Thirty Five Thousand Rand).
The
Plaintiff further claimed an amount of R15000.00 (Fifteen
Thousand Rand) for burial costs. The Plaintiffs total amount claimed
amounted to R209 662.00 (Two Hundred and Nine Thousand Six Hundred
Sixty Two Rand) plus interest thereon at a rate of 10.25% calculated
from date of judgment to date of final payment and costs of suit, as
well as interest on the costs awarded a
tempore
morae
at 10.25% per annum calculated
from the date of the taxing master's
allocatur
to date of payment.
[5]
On
or about 30 March 2017 the Plaintiff filed a report by KOCH
Consulting Actuaries in respect of the quantum of the claim at court
and also served the Defendant with a copy thereof. The matter was set
down for a pre-trial hearing on 1 November 2017 whereafter
it was set
down for trial on 29 November 2017. The matter was postponed several
times for settlement purposes. The initial offer
which was made by
the Defendant was rejected by the Plaintiff. Almost one year after
Koch Consulting Actuaries filed their report,
on 7 March 2018, did
the Defendant make a formal offer to settle the plaintiff's claim in
terms of Magistrate's Court Rule 18 in
terms whereof the Defendant
made the following offer, namely:-
(i)
Loss of Support for surviving spouse: R132 498-45.
(ii)
Loss of Support for the minor Child: R43 633-60.
(iii)
Funeral Expenses: R15000-00
The offer in total amounted to
R191 132-05 (One Hundred and Ninety One Thousand One Hundred and
Thirty Two Rand and Five Cents.)
The Plaintiff accepted the offer on
8 March 2018 and filed a Notice of Acceptance of Offer at court,
which Notice was also served
on the Defendant on the 8
th
of March 2018.
[6] On
9 March 2020 and after the offer had been accepted by the Plaintiff,
the Defendant filed and served a notice of withdrawal of the Notice
of Offer of Settlement served on 7 March 2018 and simultaneously
made
another Settlement Offer in terms of Rule 18 for a lessor amount
which offer read as follows:-
(i)
Concession of merits in favour of the plaintiff.
(ii)
Loss of Support for the surviving spouse R119 094-05
(iii)
Loss of Support for the minor child R43633.60
(iv)
Funeral Expenses R15000.00
The second lessor offer amounted
to R177727-65 in total.
[7] It
is common cause between the parties that the offer of 8 March 2018
was duly
accepted by the Plaintiff in writing. The Defendant did not
dispute that the offer which was made by the Defendant was valid and
complied with the provisions of Rule 18(5) of the Magistrate's Court
Rules. The Defendant further did not dispute that the acceptance
was
valid and that this consequently led to consensus and conclusion of a
contract. The Defendant however argued in the court a
quo that there
was justus error in that the offer was erroneously made owing to a
genuine mistake based on the fact that the Defendant
was labouring
under the impression that the Plaintiff's actuarial calculations
included contingencies and that the withdrawaI,
therefore, was
justified under the circumstances.
[8] At
the hearing of the matter, the Magistrate found in her ruling as
follows:-
''The court therefore finds
that in the absence of consensus between the parties on the offer and
acceptance, the offer and acceptance
in question is set aside and the
parties are given an opportunity to negotiate on the issue of
contingencies, or to explore other
options that are available to the
parties on the aspect of quantum."
[9]
The Magistrate in coming to
her finding, stated as follows in her reasons:-
"The situation is
different form the case at hand because in the case at hand no
information came to light after testimony
was led in court, that
information was always there, which for some reason the defendant
claims not to have seen. The legal representative
of the plaintiff
actually submits that it was not a "mistake" but rather "a
gross professional negligence".
Given the circumstances of this
case under the circumstances the court is inclined to agree with the
plaintiff on this aspect."
[10]
The Magistrate then went further and referred to the case of
Sonap
v Pappadogianis
[1992] ZASCA 56
;
1992 (3) SA 234
(A)
and
answered to the three questions as raised in the Sonap-case
supra
as
follows:-
"(i)
Was there a misrepresentation as to the one party's intention?
- In
answering the question, the court states that the defendant
in the
case at hand was not misled by anybody in anyway,
(ii)
If
so, who made the misrepresentation,
- The
first answer suffices in this circumstances,
(iii)
Would
a reasonable man be misled by the circumstances or information
brought before him,
- In
the case at hand, had the attorneys of the defendant read the
report
of the actuary with the careful consideration that is expected of
them, they would have realised as to what was stated by
the actuary
concerning contingencies."
[11]
The
Appellant filed an appeal on the grounds that:- (a) the Magistrate
erred in failing to apply the maxim caveat supscriptor to
the
defendant's written offer as well as to the plaintiff's written
acceptance of the said offer, (b) the Magistrate erred in failing
to
apply the extrinsic evidence rule to the defendant's written offer
and the plaintiff's written acceptance thereof, (c) the Magistrate
erred in allowing the defendant to renege and/or resile from the
validly concluded contract which is binding on all parties, (d)
the
Magistrate erred in finding that an oversight on the part of the
defendant, on the issue of contingencies was sufficient to
warrant
the setting aside of a valid and binding contract existing between
the parties, (e) the Magistrate erred in failing to
find that an
oversight is not a factor to be considered when determining the issue
of the validity of contracts and/or the parties'
contractual
obligations, (f) the Magistrate correctly found that there was no
mistake, but ross professional negligence, on the
part of the
defendant's attorney, but erred in setting the contract aside despite
the· finding that there was no mistake,
(g) the Magistrate
erred in finding that there was no consensus when the offer was made
and subsequently accepted, (h) the Magistrate
erred in finding
that
the
defendant did not apply contingencies when making ' the offer, (i)
the Magistrate erred in ordering the parties to go and negotiate
on
the issue of contingencies, U) the Magistrate acted
ultra
vires
her powers
in setting aside a valid contract existing between the parties, (k)
the Magistrate incorrectly applied the principle
adopted in the case
of Adv. T Mphela o.b.o S.... Z... v Road Accident Fund, case number
56873/2012 , (I) the Magistrate erred in
failing to apply the
principle of
stare
decisis
with
reference to case law, (m) the Magistrate erred, and acted
ultra
vires
her
powers, in making a ruling which seeks to contradict the judgments of
the Superior Courts.
Case
Law:
[12] In
Christie,
The Law of Contract in South Africa, 6
th
edition page 328,
the
learned author gives the following guiding observation of the law of
contract:
"When a layman says he
made a mistake in entering into a particular contract the lawyers
comment, after listening to the story,
will often be that this is the
sort of mistake for which the law can provide no remedy. Paraphrasing
the layman's description of
his action as mistaken, the lawyer will
say that it was ill-advised or due to an error of judgment. If the
law were to give relief
from what, in retrospect, are seen as errors
of judgment the whole concept of a contract as binding and
enforceable agreement would
be destroyed."
[13]
This court agrees with the
above observation. The question is was there iustus error? The
Defendant as already stated here above
alleges that there was a
mistake. In answering this question the court must ordinarily employ
the set of questions usually employed
in considering iustus error.
These questions were clearly set out by Davis AJ (as he then was) in
Prins v Absa Bank Ltd 1998 (3)
SA 904 (C) as follows:-
"(a) I there
consensus?
(b) If not, is
there dissensus caused by a mistake?
(c) Is the
other party aware of the resiler’s mistake?
(d) Who
induced the mistake and was it done by commission or omission which
was either fraudulent,
negligent or even innocent?"
[14] The
Defendant needed to show that at the time that the settlement offer
was made, the Defendant acted
under some misapprehension or
misunderstanding as to the terms, import or effect of the contract.
In
Dole South Africa (Pty) Ltd v Pieter Beukes (Pty) Ltd
2007 (4)
SA 577
(C) at 587
the court held as follows:-
"A party to a contract who
has concluded same whilst labouring under a bona fide and reasonable
mistake as to its contents
will not be bound by the provisions
thereof In particular, where the contracting party has been led to
believe by the other party
that the contract contains certain
provisions, which in fact it does not, the party relying upon the
misrepresentations, will not
be bound by the agreement."
[15]
The Defendant had to prove dissensus in the conclusion of the
contract. In this court's view, the Defendant
failed to prove any
dissensus and in fact the Defendant's own version is that a valid and
binding agreement was entered into. It
should be borne in mind that
the Defendant made the settlement offer after having had access to
the report of Koch Actuary Consultants
for almost one year. In the
report on page 1 thereof the following was stated:-
"Note
that
the above
values have not been adjusted for general contingencies save that
full allowance for early and late death, in accordance
with the life
table, has been included in the capitalization process '
The
Magistrate was incorrect in her finding that there was no consensus
between the parties. There is therefore no need that the
further
questions posed in
Prins
v Absa Bank Ltd
supra
be
determined.
[16] In a dictum
in
Absa Bank Ltd v The Master and
Others NNO
1998 (4) SA 15
(N)
the
following was held:-
"A unilateral mistake,
other than a mere error in the motive, also does not allow the party
labouring under the erroneous belief
to repudiate his apparent assent
to a contract except in very narrow circumstances, as explained in
George v Fairmead (Pty) Ltd
1958 (2) SA 465
(A) at 471 and National &
Overseas Distributors Corporation (Pty) Ltd v Potato Board
1958 (2)
SA 473
(A) at 479. The effect of these decisions is that, for a
unilateral mistake to vitiate the necessary assent to a contract, the
error must be a justus error. In this respect the 'courts in applying
the test, have taken into account the fact that there is another
party involved and have considered his position. They have, in
effect, said: Has the first party - the one who is trying to resile
-
been blame in the sense that by his conduct he has led the other
party, as a reasonable man, to believe that he was binding himself?"
[17] The
Defendant cannot say that there was dissensus between the parties let
alone that it arose
by virtue of mistake. In this regard the
Magistrate was correct in finding that
"it
was not a "mistake" but rather
"a
gross professional negligence".
[18] The
parol evidence rule
prescribes that where parties to a
contract have reduced their agreement to writing, it becomes the
exclusive memorial of the transaction,
and no evidence may be led to
prove the terms of the agreement other than the document itself, nor
may the contents of the doci1ment
be contradicted, altered, added to
or varied by oral evidence.
[19]
In the recent case of
Mike
Ness Agencies CC t/a Promech Boreholes v Lourensford Fruit Company
(Pty) Ltd
(922/2018)
[2019] ZASCA 159
,
which
was before the Supreme Court of Appeal (SCA), Lourensford Fruit
Company (Pty) Ltd (Lourensford) attempted to argue that it
h2d
verbally agreed to a certain additional term to an agreement which
was concluded with Mike Ness Agencies CC
t/a
Promech
Boreholes (Promech), which term was not included in the written
Agreement between the two parties. In its judgment, the
SCA
reiterated what it previously held in the case of
Affirmative
Portfolios CC v Transnet Limited t/a Metrorail
[2008] ZASCA 127
;
2009
(1)
SA 196
(SCA),
namely
that,
"where
an agreement is partially written and partially oral, then the parol
evidence rule prevents the admission only of extrinsic
evidence to
contradict or vary the written portion without precluding proof of
the additional or supplemental oral agreement. This
is often referred
to as the 'partial integration' rule."
Considering
the above, the SCA held,
inter
alia,
that
the oral portion of the agreement, as contended for by Lourensford,
contradicted and varied the written portion of the agreement
and as a
result thereof, evidence on the oral portion of the agreement would
offend the
parol
evidence rule
and
be inadmissible. This court therefore is of the view that the
Magistrate erred in failing to apply the parole evidence rule
in
terms whereof when a legal act is incorporated into a document, only
the document itself is
admissible
as to the terms of the legal act, and extrinsic evidence extraneous
to the document itself is inadmissible in so far
as it tends to
contradict or change the contents of the document.
[20] In
Christie
(The Law of Contract in South Africa) at pages 329 to 330
the
author stated as follows:-
"However material the
mistake, the mistaken party will not be able to escape from the
contract if his mistake was due to his
own fault. This principle will
apply whether his fault lies in not carrying out the reasonably
necessary investigations before
committing himself to the contract,
that is, failing to do· his homework; [Wiggins v Colonial
Government
(1899) 16 SC 425
429; Acacia Mines Ltd v Boshoff
1957 1 SA
93
(T) 101H- 1028 ; Lindsay v Beukes 1958 2 PH A34 (E); Diedericks v
Minister of Lands
1964 1 SA 49
(N) 57O-H; Springvale Ltd v Edwards
1969 1 SA 46
4 (RA) 468 470H; Osman v Standard Bank National Credit
Corporation Ltd
1985 2 SA 378
(C) 388 F-I], in not bothering to read
the contract before signing; [Ex parte Rosenstein
1952 2 SA 324
(T);
Standard Credit Corporation Ltd v Naicker
1987 2 SA 49
(N)J; in
carelessly misreading one of the terms; [Patel v Le Cius (Pty) Ltd
1946 TPD 30]
; in not bothering to have the contract explained to him
in a language he can understand; [Mathole v Mathie 1951 a SA 256
(T)],
in misinterpreting a clear and unambiguous term, (Van Pletzen v
Henning
1913 AD 82
89; Irwin v Davies
1937 CPD 442-:447]
, and in fact
in circumstances in which the mistake is due to his own carelessness
or inattention, for he cannot claim that his
error is iustus. It is
not sufficient simply to avoid condemnation as careless or
inattentive , for the mistaken party must go
further and discharge
the onus of proving that his mistake was, in the eyes of the law,
reasonable."
[21]
In PM obo TM v Road
Accident Fund (1175/2017) [2019] ZASCA 97; [2019] 3 All SA 409 (SCA);
2019 (5) SA 407 (SCA) (18 June 2019) the
court held at paragraph 55
thereof as follows:-
"[55]
The next issue to consider is the effect of the settlement agreement
concluded by the parties. Madlanga
J, writing for the majority of the
Constitutional Court in Eke v Parsons, had the following to say in
this regard:
'The effect of a settlement
order is to change the status of the rights and obligations between
the parties. Save for litigation
that may be consequent upon the
nature of the particular order, the order brings finality to the lis
between the parties; the lis
becomes res judicata (literally, "a
matter judged'?- It changes the terms of a settlement agreement to an
enforceable court
order. The type of enforcement may be execution or
contempt proceedings. Or it may take any other form permitted by the
nature
of the order. That form may possibly be some litigation the
nature of which will be one step removed from seeking committal for
contempt; an example being a mandamus.
Litigation antecedent to
enforcement is not necessarily objectionable . That is so because
ordinarily a settlement agreement and
the resultant settlement order
will have disposed of the underlying dispute. Generally, litigation
preceding enforcement will relate
to non-compliance with the
settlement order, and not the merits of the original underlying
dispute. That means the court will have
been spared the need to
determine that dispute - depending on the nature of the litigation -
might have entailed many days of contested
hearing.'
[56] It is correct that when a
court is called upon by the parties to make a settlement agreement an
order of court, it does not
have to do so. It has a discretion. In
this regard, Madlanga J said the following in Eke:
'This in no way means that
anything agreed to by the parties should be accepted by a court and
made an order of court. The order
can only be one that is competent
and proper. A court must thus not be mechanical in its adoption of
the terms of a settlement
agreement. For an order to be competent and
proper, it must, in the first place, "relate directly or
indirectly to an issue
or lis between the parties". Parties
contracting outside of the context of litigation may not approach a
court and ask that
their agreement be made an order of court. On this
Hodd says:
"(l)f two merchants were
to make an ordinary commercial agreement in writing, and then were to
join an application to court
to have that agreement made an order,
merely on the ground that they preferred the agreement to be in the
form of a judgment or
order because in that form it provided more
expeditious or effective remedies against possible breaches, it seems
clear that the
court would not grant the application."
That is so because the
agreement would be unrelated to litigation.
Secondly, "the agreement
must not be objectionable, that is, its terms must be capable, both
from a legal and a practical point
of view, of being included in a
court order". That means, its terms must accord with both the
Constitution and the law. Also,
they must not be at odds with public
policy. Thirdly, the agreement must hold some practical and
legitimate advantage ".'
[22] In
PM
obo TM v Road Accident Fund
supra,
the court held further at paragraph
57
to 60 thereof as follows.
-
"[57] It
is apparent from this analysis that no discretion can be exercised in
the air. If the court is to
exercise its discretion against making a
settlement an order of court, there must be a basis for it to do so.
That basis may be
gleaned from the facts pleaded before it by the
parties or objectively available factors. What this means is that,
for the court
to be able to make the settlement an order of court, it
must have jurisdiction. that is to say, the power to adjudicate upon,
determine
and dispose of a matter. The court must be satisfied that
the order that it is required to make is competent and proper in the
sense that it will have the power to compel the person against whom
the order is made, to make satisfaction. Secondly, it must satisfy
itself that the agreement is not objectionable and that it must hold
some practical and legitimate advantage. Where necessary,
the court
must play an oversight role when it is of the opinion that the terms
of the agreement are inadequate. In such instances
it may even insist
that the parties effect the necessary changes to the terms of the
settlement agreement as a condition for the
making of the order.
[58]
This analysis makes it clear that the
court has a discretion to make a settlement an order of court. In
exercising its discretion,
it must consider all relevant factors in
light of the guidelines set out by the Constitutional Court in Eke.
As indicated, in the
present case the trial court refused to make the
settlement agreement an order of court on the ground that it was not
satisfied
that it was in accordance with the documents and pleadings
filed of record.
[59]
In my view, this was an irrelevant
consideration and its effect
was
to
second-guess the parties' decision to agree to settle the issues as
they defined them in their pleadings. It is not for the court
to vary
the issues so defined. It is for the parties to drive the litigation
process. It must be recalled that when the matter
was called by the
court of first instance, counsel for the respondent informed the
court that the parties were busy negotiating
settlement and when it
was
later
called, the parties informed the court that they had settled.
[60]
It was not suggested that the order
which- the parties requested the court to make was improper or
incompetent, or that the agreement
to settle was in any way
objectionable or was as a result of any collusion between the
parties. None of these were raised with
the parties and for that
reason it could not have been used as a ground to refuse to make the
settlement agreement an order of
court."
[23] This
court is in agreement with the approach of
Christie
supra,
as
well
as
the approach followed in
P
M
obo
T
M v Road Accident Fund
supra.
The Magistrate by setting aside the settlement agreement entered into
between the parties did not consider all relevant factors
in light of
the guidelines
set
out
by the Constitutional Court in
Eke
v Parsons
[2015] ZACC 30
;
In
paragraph 27 to 28 held
as
follows:-
"[27]
The less restrictive approach adopted in this judgment Ls in line
with the wide power that courts
have to regulate their process. This
power is expressed in section 173 of the Constitution, which
provides:-
"The Constitutional Court,
the Supreme Court of Appeal and the High Court of South Africa each
has the inherent power to protect
and regulate their own process, and
to develop the common law, taking into account the interest of
justice."
[28]
This is what this Court has said about the inherent power:
"[T]he power conferred on
the High Courts, Supreme Court of Appeal and this Court in Section
173 is not an unbounded additional
instrument to limit or deny vested
or entrenched in rights. The power in Section 173 vests in the
judiciary the authority to uphold,
to protect and to fulfil the
judicial function of administering justice in a regular, orderly and
effective manner. Said otherwise,
it is the authority to prevent any
possible abuse of process and to allow a Court to act effectively
within its jurisdiction
."
It
is clear that only the Constitutional Court, Supreme Court of Appeal
and High Court of South Africa is vested with an inherent
power and
not the Magistrate's Court, and in this present matter the Regional
Court The Magistrate acted beyond her powers and
jurisdiction by
setting aside the settlement agreement and ordering the parties to
negotiate further on the issue of quantum. The
Settlement agreement
entered into between the parties dated the 8
th
of
March 2018 is a valid and binding agreement, is not
contra
bones mores
and
is there no
other reason in law why this agreement should have been set aside.
The appeal must therefore succeed.
[24] The only
issue remaining is costs. The general rule is that the·
successful party should
be awarded costs. The Defendant did not
oppose the Appeal, but there is in this court's view no reason why
the general rule should
not be applicable and in the result the
appeal succeeds with costs.
Order:
[25]
The following order is
made:-
1.
Application for condonation for the
late prosecution of the appeal is granted;
2.
The appeal is upheld with costs,
including the costs of the court
a
quo;
3.
The Notice of Acceptance
of the Offer dated 08/03/2018 is made an Order of Court;
4.
The Order made by the Court
a
quo
setting aside the
accepted offer is set-aside and it is substituted with the following
order:-
"The Notice of
Acceptance of the Offer made by the Defendant on 08/08/2018 is made
the order of court."
5.
The Defendant is ordered to pay to
the Plaintiff an amount of R191 132.05 together with interest thereon
at the rate of 10.25% per
annum from date of Judgment to final
payment.
M.
NAUDE
ACTING
JUDGE OF THE HIGH COURT
LIMPOPO
DIVISION, POLOKWANE
I AGREE, and it is so ordered.
M.G PHATUDI
JUDGE OF THE HIGH COURT
LIMPOPO DIVISION, POLOKWANE
APPEARANCES:
HEARD
ON:
21 AUGUST 2020
ORDER
DELIVERED ON 21
SEPTEMBER 2020
For
the Appellant:
Mr. L.M. Mabotja
Instructed
by:
Makwela & Mabotja Attorneys
For
the Respondent:
None