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[2020] ZALMPPHC 92
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Phadu v Road Accident Fund (HCA15/2019) [2020] ZALMPPHC 92 (21 September 2020)
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Certain
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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 the 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 witdrawal,
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 and 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, (j) 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
resilers 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
had
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
464
(RA) 468 470H;
Osman v Standard Bank National Credit Corporation Ltd
1985 2
SA
378
(C) 388F-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 /is between the
parties; the /is 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