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[2014] ZAGPPHC 282
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Mphelela obo S.Z v Road Accident Fund (56873/12) [2014] ZAGPPHC 282 (1 April 2014)
SAFLII
Note: Certain personal/private details of parties or witnesses
have been redacted from this document in compliance
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SAFLII
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IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
No: 56873/12
DATE:
01 APRIL 2014
In the matter
between
ADV. T MPHELELA
obo S….. Z…..
.......................
PLAINTIFF
And
ROAD ACCIDENT
FUND
.................................
DEFENDANT
JUDGMENT
MOLEFE J:
[1] The plaintiff
Advocate T Mphelela, acts in her representative capacity as a curator
ad litem of the minor child, S…..
Z…... She instituted
a claim against the defendant in terms of the Road Accident Fund Act
56 of 1996 (“the Act”)
for loss of support suffered by
the minor child as a result of the death of the child’s mother
in a motor vehicle accident
which occurred on 18 February 2005.
[2] Plaintiff’s
legal representatives had lodged a claim for compensation with the
defendant in terms of the provisions of
Section 24 (5) of the Act.
[3] On 14 September
2012, the Defendant wrote to the Plaintiff’s attorneys offering
to settle the child’s claim by paying
R174 254 -83. The offer
included the claimant’s taxed or agreed party and party costs.
The plaintiff’s attorneys signed
the discharge form accepting
the offer on behalf of the minor child on 18 September 2012. Pursuant
thereto, an amount of R174 254-83
was paid to the plaintiff’s
attorneys.
[4] The plaintiff’s
attorneys sent a letter to the defendant, dated 20 September 2012
with heading “revocation/avoidance
of acceptance (Z…..
T.E)”. The contents of the letter read as follows:
“Kindly take
heed that we have received an amended mandate from our client (Z….)
to revoke and/or avoid the offer (which
was erroneously accepted
through our letter dated 18 September 2010) on the basis that Legal
Costs were not offered and also that
the quantum proffered is not
adequate.
Further, it is our
mandate to issue summons and eventually litigate the matter to
finality, which bears the prospect of attaining
a higher capital
amount.
In casu, we hereby
declare the aforesaid offer to be null and void and if you hold a
view contrary to the latter declaration, kindly
revert on or before
the end of today”.
[5] In due course
the plaintiff issued summons against the defendant, seeking to claim
larger damages for the minor child’s
loss of support and
maintenance in the amount of R1 245 400-00.
[6] The defendant
raised a special plea that the plaintiff’s claim was settled
and finalised in that an offer of settlement
was made and accepted in
full and final settlement on 18 September 2012 and payment duly
effected on 19 September 2012.
[7] The main issue
to be adjudicated by this Court arises out of the defendant’s
special plea and is whether the agreement
settling the claim for
damages should be recognised as binding or be set aside.
[8] In seeking to
set aside the settlement agreement, plaintiff’s Counsel1
submitted that the settlement agreement was void
or voidable due to
the “honest mistake” made by the plaintiff’s
attorneys and more importantly that the offer
was prejudicial to the
interest of the child and in this regard relied on the case of Road
Accident Fund v Mvhill No
2013 (5) SA 426
(SCA). Counsel argued that
the offer was accepted prior to the attorney receiving the actuarial
report that indicated that the
damages were much greater than the
accepted amount. The actuarial report as well as the industrial
psychologist report were made
available to the defendant after the
offer of settlement.
1 Advocate M
Ramoshaba
[9] The defendant’s
Counsel2 submitted that the settlement agreement constitutes a
transactio and referred the court to the
case of Georgias v Standard
Chartered Finance Zimbabwe ltd
2000 (1) SA 126
(ZSC)3, wherein it was
explained as follows:
“Compromise or
transactio is the settlement by agreement of disputed obligations, or
a lawsuit the issue of which is uncertain.
The parties agree to
regulate their intention in a particular way, each receding from his
previous position and conceding something
- either diminishing his
claim or increasing his liability”.
[10] Defendant’s
counsel relied on Nagar v Nagar
1982 (2) SA 263
(ZH) at 268 E
-H, wherein the
court held that the purpose of compromise is to end doubt and to
avoid the inconvenience and risk inherent in resorting
to the methods
of resolving disputes. Its effect is the same as res juridicata on a
judgment given by consent. It extinguishes
ipso jure any cause of
action that previously may have existed between the parties, unless
the right to rely thereon was reserved.
A compromise induced
by fraud, duress, Justus error, misrepresentation or some other
ground for rescission, is voidable at the instance
of the aggrieved
party, even if made an order of court, (see Gollach and Gomperts
(1967) (Pty) Ltd and Others
1978 (1) SA 914
(A) at 922 H.
[11] Defendant’s
counsel argued that in casu there is no suggestion that the
transactio was obtained fraudulently but that
it should be set aside
on the ground of mistake by the plaintiffs attorney. The plaintiff
purported to cancel the transactio on
the basis that the offer was
“erroneously accepted’ on the basis that legal costs
2 Advocate C Snoyman
3 At 138 T - 140 I
were not offered and
that the quantum proffered [was] not adequate". The legal costs
were in fact offered in the settlement
offer. Counsel further argued
that if the plaintiff’s attorney was of the opinion that
quantum proffered was inadequate,
then the plaintiff’s attorney
was under no obligation to accept the offer. Furthermore, the
plaintiff’s acceptance
of the offer cannot constitute a mutual
mistake or any other ground of Justus error, which would avoid the
transactio. He argued
that there is no Justus error and that the
transactio cannot be set aside and this matter, be regarded as res
judicata. He submitted
that the action should accordingly be
dismissed with costs.
[12] A settlement
not only does away with the inherent uncertainties of litigation but
also limits the escalation of costs and brings
about an immediate
payment rather than one forthcoming at some future uncertain stage.
It is clear that in accepting the offer
of settlement, the
plaintiff’s attorney breached a statutory duty to ensure that a
reasonable compensation was made to the
minor child by obtaining the
necessary experts’ reports.
[13] In Gollach v
Gomperts v Universal Mills and Produce Co.supra, the court held that
a unilateral mistake must also be reasonable
in the sense that it
must be justus error. No definite criteria can be given to establish
what is or what is not a Justus error.
The field of unilateral
mistake is very narrow, where it has not been induced by the other
party. At very least it would have to
be justus. See National and
Overseas Distributors Corporation v Potato Board 1958 (2) SA at p 479
E - H.
[14] I am not aware
of any reason why justus error should not be a good ground for
setting aside such a consent judgment, and therefore
also an
agreement of compromise, provided that such error vitiated true
consent and did not merely relate to motive or to the merits
of the
dispute which it was the very purpose of the parties to compromise.
Natal Bank v Kuranda 1907 T H at pp 167-8.
[15] An error is
justus when it is reasonable or excusable in all the circumstances of
the particular case. That is, the further
question must be asked
whether a reasonable person would have been misled. See Brink v
Humphries and Jewell (Pty) Ltd
2005 (2) SA 419
(SCA) para 8. A
mistaken party may resile from the contract even if the mistake was
caused by his own negligence, where the other
party ought, as a
reasonable person to have been aware of the mistake, for the latter
cannot claim reasonably to have been mistaken
as to the intentions of
the former. Brink v Humphries and Jewell (Pty) Ltd 2005 supra.
[16] Counsel for the
appellant correctly argued that the offer accepted by the plaintiff’s
attorney is prejudicial to the
interest of the child. Despite the
advantages attendant upon settling the claim before the issue of
summons, in my view the agreement
falls to be rescinded. I also take
my cue from the Road Accident Fund v Mvhill No Case (supra). The
prejudice to the minor child
in casu is obvious; the amount of an
innocent minor’s claim against the defendant would be
diminished by reason of the fault
of the legal representative.
[17] Although a
court should always be cautious in interfering with compromises
seriously concluded, there is in my view, such substantial
prejudice
to be suffered by the minor child that the settlement agreement
cannot be allowed to stand.
Accordingly, the
following order is made;
a) the special plea
is dismissed;
b) costs are
reserved to be determined by the trial Court.
D.S. MOLEFE
JUDGE OF THE HIGH
COURT
APPEARANCES:
Counsel on behalf
of plaintiff Adv. M Ramoshaba
Instructed
by Mamokgalake Chuene Attorneys
Counsel on behalf
of defendant: Adv. C Snoyman
Instructed
by Sishi Incorporated Attorneys
Date Heard 20
March 2014
Date Delivered 1
April 2014