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[2019] ZASCA 97
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P M obo T M v Road Accident Fund (1175/2017) [2019] ZASCA 97; [2019] 3 All SA 409 (SCA); 2019 (5) SA 407 (SCA) (18 June 2019)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 1175/2017
In
the matter between:
P
M APPELLANT
OBO
T M
and
ROAD
ACCIDENT
FUND RESPONDENT
Neutral
citation:
P M
obo T M v Road Accident Fund
(1175/2017)
[2019] ZASCA 97
(18 June 2019)
Coram:
Maya P and Wallis, Zondi and Mocumie
JJA and Weiner AJA
Heard:
2 May 2019
Delivered:
18 June 2019
Summary:
Delict –
Settlement of damages claim against the Road Accident Fund –
judge declining to make settlement agreement an
order of court and
requiring the trial to continue on the merits – application to
declare trial a nullity – irregular
procedure – Court’s
duty when asked to make settlement agreement an order of court.
ORDER
On
appeal from:
Limpopo
Division of the High Court, Polokwane (Muller J, Phatudi and Semenya
JJ
concurring, sitting
as court of appeal):
1. The appeal is
dismissed.
2. There is no order as
to costs.
JUDGMENT
Weiner AJA (Maya P and
Wallis JA concurring):
[1]
On the first day of the trial before Mokgohloa DJP in the Limpopo
Division of the High Court, the parties concluded a settlement
agreement. They asked the judge to make it an order of court, but she
declined to do so and indicated that the trial should continue
on the
merits. Some evidence was led and the court adjourned. Thereafter an
application was brought to halt the trial, declare
it a nullity, and
make the settlement agreement an order of court. The court dismissed
that application and an appeal, with her
leave, to the full court of
the division (Muller J, Phatudi and Semenya JJ concurring), was also
dismissed. This further appeal
is with special leave of this court.
Background
[2]
The appellant,
Mrs M
,
on behalf of her minor child,
issued summons against the Road Accident Fund (the ‘RAF’).
She averred that the child’s
father had been killed in a
collision that occurred on 6 July 2014 and that the sole cause of the
collision was the negligence
of the insured driver.
As
a result of the death of the deceased, the appellant claimed that the
minor child had been deprived of maintenance and support.
His loss of
support related to past loss of support in the sum of R200 000 and
future loss of support in the sum of R800 000. Thus
the claim was for
R1 million. The RAF defended the matter. The trial was set down for
12 September 2016. It was rolled over
to 13 and then 14
September 2016. It was allocated to the DJP for her to preside over
it. When the matter was called for the trial
to commence on 14
September, the parties requested that the matter stand down as the
parties were attempting to settle the matter.
The judge stood the
matter down, but informed the parties that she was ready to commence
with the trial. The parties returned at
14h00 and requested the court
to make the settlement agreement (the ‘agreement’) an
order of court. The agreement provided
that the RAF was liable to pay
the appellant 100 percent of her proven or agreed damages. The
damages were agreed in the sum of
R561 314.63.
[3]
The judge was not satisfied that the agreement should be made an
order of court. She remarked that she had noticed that, according
to
the pleadings and certain of the witness statements, there was no
indication that the insured driver was negligent at all. The
deceased
had attempted to overtake a bakkie that was in front of him. The
collision occurred whilst the deceased was overtaking
the bakkie when
he collided with an oncoming vehicle being driven by the insured
driver. There was nothing in the papers that suggested
that the
insured driver could have avoided the collision.
[4]
The judge enquired from the RAF’s counsel whether she was
satisfied with the agreement. As appears from the record, counsel
stated:
‘
MS MASHABA:
M’lady we are not satisfied. The only challenge that I had . .
. is that I was briefed on this matter yesterday.
I tried to get hold
of the insured [driver] . . . I actually did go through all the
statements and realised that really we cannot
actually find the 1%.
So the insured driver had actually said he could not be here today.
So since this matter was set down for
trial today we realised we do
not have any evidence to . . . counter what they are saying.’
[5]
The judge refused to make the agreement an order of court. She
required witnesses to testify as to how the collision had occurred.
The trial commenced on 14 September. The respondent called Mohlehle
David Maake,
[1]
a passenger in the deceased’s vehicle, who commenced giving
evidence. The matter could not be finalised, and was postponed
sine
die
for a date to be arranged. Such date was later agreed to be 12
October 2016.
The
Application
[6]
On 7 October 2016, the appellant launched an application seeking the
following relief:
‘
1. Calling
off the part-heard trial in the matter which commenced on Wednesday,
14 September 2016 and postponed for continuation
on Wednesday, 12
October 2016 at 10h00 in the forenoon.
2. That the said trial be and is
hereby forthwith annulled.
3. Declaring that the
lis
between the Applicant and the Respondent which was to be the subject
matter of the trial which was to commence on Wednesday, 14
September
2016 at 10h00 in the forenoon before this Court . . . to have been
fully and finally settled between the parties in terms
of the
agreement and resultant draft order made and prepared by the parties
and bearing the same date of Wednesday, 14 September
2016.
4. That the draft
order in paragraph 3 above is hereby made an order of the Court.’
[7]
The RAF did not oppose the application. It has played no part in
either in the full court or in this court.
[8]
The appellant alleged in her founding affidavit that the
lis
between the parties had been settled and that there was no basis, in
fact or in law, for a hearing or a trial to take place. She
contended
that, in the face of an agreement having been concluded the
proceedings and the trial, as well as the presiding judge’s
direction that the trial should proceed, were fatally flawed and
irregular. The court no longer had the jurisdiction or power to
continue to hear evidence and further pronounce on the matter.
The
issues
[9]
There are two issues for decision. The first is whether it was
permissible to challenge the Judge’s decision in this way.
Only
if it was, do we reach the second issue, namely, whether her approach
to the settlement agreement was permissible.
[10]
The appellant argued that the procedure adopted to challenge the
court’s decision was well founded. The reasoning underpinning
the argument was that the decision to settle the case was entirely a
matter for the parties, in which the judge had no role to
play. Once
they had concluded the settlement there was no longer a
lis
between them. The effect was to deprive the judge of jurisdiction to
adjudicate that non-existent
lis.
Her jurisdiction extended only to making the order that the parties
asked her to make. Accordingly, when she refused to make the
settlement an order of court and required evidence to be led on the
question whether the insured driver had been negligent to any
degree,
she overstepped the limits of her jurisdiction. The resultant
proceedings were a nullity and it was appropriate to seek
an order
declaring that to be so.
[11]
The appellant relied upon
PL
v YL
,
[2]
a divorce action, where the following was said:
‘
Once the
parties to a civil action have reached agreement in relation to the
issues raised by the action, and elected not to seek
the relief
claimed therein, the mandate of the court to determine those issues
and to grant the relief claimed by the respective
parties is
terminated. Any order which is then granted by the court is simply
made with a view to assisting the parties in
resolving
their disputes and facilitating the
enforcement of the terms
of their
agreement . . . .
. . . .
This finding is
premised on the adversarial model on which dispute resolution is
based in our law, namely that the court’s
mandate or
jurisdiction is determined by the lis between the parties. The
court’s authority in other words does not extend
beyond the
issues which the action is capable of raising, and which the parties
themselves have raised in their pleadings.’
[12]
The appellant submitted that
PL
v YL
was authority
for the submission that, once the parties reached an agreement, the
court could not decide on other issues raised
in the pleadings as its
mandate was determined by the
lis
between the parties and that
lis
had been resolved.
[13]
The choice of language in the two paragraphs quoted above from the
judgment in
PL v YL
was unfortunate and
gives an incorrect picture of the legal position that arises when
parties conclude a settlement agreement. Litigants
do not mandate
courts to decide disputes, and the language of agency or mandate is
inappropriate to describe the judicial function.
Nor should the
jurisdiction of courts be conflated with the concept of mandate.
Courts are the judicial arm of the State. They
are charged, inter
alia
,
with
the determination of civil disputes that arise in the ordinary course
of events. Their jurisdiction to do so is founded in
Chapter 8 of the
Constitution and defined in various statutes and the common law. In
the case of the high court, the relevant statute
is the
Superior
Courts Act 10 of 2013
.
[14]
Litigants seeking relief invoke the jurisdiction of a court, usually
by way of an action or an application. The issues in any
particular
litigation will be determined by the pleadings or affidavits and may
be expanded by the parties in the course of the
proceedings. It is
not for the court to vary the issues so defined.
[3]
But, once the case has been placed before the court for adjudication,
it is obliged to adjudicate upon the issues it raises by
rendering a
judgment, unless the parties specifically withdraw all or some of the
issues from judicial consideration. This can
be done by abandoning a
claim or defence, or by withdrawing the action or application in its
entirety, subject to certain limitations.
[15]
When the parties arrive at a settlement, but wish that settlement to
receive the
imprimatur
of
the court in the form of a consent order, they do not withdraw the
case from the judge but ask that it be resolved in a particular
way.
The grant of the consent order will resolve the pleaded issues and
possibly issues related ‘directly or indirectly to
an issue or
lis
between
the parties’.
[4]
Contrary to the passages quoted above, the jurisdiction of the court
to resolve the pleaded issues does not terminate when the
parties
arrive at a settlement of those issues. If it did, the court would
have no power to grant an order in terms of the settlement
agreement.
[16]
The correct position is that the grant of an order making a
settlement agreement an order of court necessarily involves an
exercise of the court’s jurisdiction to adjudicate upon the
issues in the litigation. Its primary purpose is to make a final
judicial determination of the issues litigated between the parties.
Its order is
res
judicata
between
the parties
[5]
and the issues raised by the parties may not be re-litigated. The
fact that the court’s jurisdiction remains intact when
the
parties settle a case is illustrated by
PL
v YL
itself and the countless cases that come before our courts where
parties to a matrimonial dispute settle their differences and
the
case proceeds on an unopposed basis. Notwithstanding the settlement,
the court must have retained jurisdiction for the simple
reason that
otherwise the parties would not be divorced, as only a divorce order
can bring about the termination of a legal marriage.
The basic
premise on which the appellant’s argument was based was
therefore incorrect.
[17]
That conclusion is reinforced by the events in this case. The
application was brought as an interlocutory application in the
trial
itself. It was lodged under the same case number and was brought
before and heard by the trial judge. There is established
authority
that the decisions of the high courts are not subject to review. In
Pretoria
Portland Cement Co Ltd v Competition Commission
this
court held as follows:
[6]
‘
[The High
Court] is not itself the subject of review . . . . There are other
means, quite sufficient means . . . by which the judgment
of a Judge
may be corrected. The primary means of correction of judicial error
is appeal to a higher Court, which is appropriate
where a Judge has
reached a final decision.’
[18]
When the court was asked to make the settlement agreement an order of
court, the trial had been called on before her; counsel
for the
parties had announced their appearances and she had indicated that
she was ready to proceed with the matter.
[7]
When the court refused to make the agreement an order of court,
the trial action remained alive, not having been terminated
by either
a judgment or a withdrawal. The evidence that was led was evidence in
that trial. The appropriateness of the application
as a means of
reversing the court’s refusal to make the settlement an order
of court must be adjudicated against that background.
[19]
The fundamental premise of the argument on the application was that
the settlement put an end to the
lis
between the parties
and thus deprived the court of any further jurisdiction. That premise
has been shown to be incorrect. The court’s
jurisdiction was
unaffected by the agreement, as evidenced by the fact that it was
being asked both to adjudicate on the application
and (once more) to
make the agreement an order of court. This relief was being sought in
the very action where it was claimed that
the court had been deprived
of its jurisdiction. The basis for the application – absence of
jurisdiction – was therefore
inconsistent with the relief being
sought, which was that the same court, in the same action, should
grant the relief prayed in
the application. In order to grant that
relief the court must have retained jurisdiction in the action. The
settlement agreement
had not put an end to it.
[20]
Counsel pointed to no other authority that would have authorised the
judge to ‘call off’ the part-heard trial and
declare it
to be annulled. The position therefore remained that the proceedings
with which she was seized was an uncompleted trial
in an action for
damages. As the trial had not run its full course, there was no
appealable judgment to be assailed in another
court. The endeavour to
create one by way of an interlocutory application in that trial could
not succeed.
[21]
The time at which that endeavour was made is also decisive. The
authorities are clear that it is only in very rare circumstances
that
a court will review a decision, or allow an appeal before the
proceedings have been terminated. As Howie P stated in
S
v Western Areas Ltd
:
[8]
‘
Long
experience has taught that in general it is in the interests of
justice that an appeal await the completion of a case whether
civil
or criminal. Resort to a higher Court during proceedings can result
in delay, fragmentation of the process, determination
of issues based
on an inadequate record and the expenditure of time and effort on
issues which may not have arisen had the process
been left to run its
ordinary course.’
[22]
Even where there is a power of review, as is the case with
uncompleted proceedings in a magistrates’ court, there is
long-standing authority that such proceedings will not ordinarily be
reviewed by the high court until they have run their full
course, at
which stage an appeal or review may be brought.
[9]
I
n
Ismail
and others v Additional Magistrate, Wynberg & another
,
[10]
applying the decision in
Wahlhaus
,
the following was stated:
‘
[I]t is not every failure of
justice which would amount to a gross irregularity justifying
interference before conviction. . . .
[W]here the error relied upon
is no more than a wrong decision, the practical effect of allowing an
interlocutory remedial procedure
would be to bring the . . . decision
under appeal at a stage when no appeal lies.’
[23]
The appellant’s case was premised on the claim that the judge’s
decision was wrong. No appeal or interlocutory
proceeding to reverse
that decision lies whilst the proceedings are ongoing. The full court
was therefore correct in holding that
the application was
misconceived and the relief sought in prayers 1 and 2 incompetent.
The appellant submitted that she could still
pursue prayer 3 if the
relief sought in prayers 1 and 2 was ill-conceived. This concession
was not made in the court a quo and,
after finding that the relief
sought was incompetent, the full court did not deal with prayer 3.
[24]
I do not think that it was competent for the appellant to abandon
those two prayers and seek to rely upon prayer 3 alone. The
trial
before the court has not ended. Issuing a declarator in terms of
prayer 3 amounts, in effect, to reviewing the court’s
decision
to continue with the trial. That is impermissible as demonstrated
above in relation to the relief in prayers 1 and 2.
The appeal must
therefore fail.
The
settlement agreement
[25]
Although it is not necessary to decide whether the court had the
power to refuse to make the agreement an order of court,
it is necessary to make some remarks
in this regard. The issue of the court’s discretion, in
relation to making a settlement
agreement an order of court, occurs
frequently in courts throughout the country in damages claims against
organs of State involving
the disbursement of public funds.
[26]
It is submitted by the appellant that the draft order which was
presented to the trial judge complied with the relevant requirements
of the Limpopo Practice Directives,
[11]
and that was all that was required. This submission cannot hold. A
court’s jurisdiction and/or discretion cannot be ousted
by a
practice directive, which deals only with procedural matters.
[27]
The appellant argues that only in circumstances where the agreement
contains terms which are unconscionable, illegal or immoral,
can a
court refuse to make the settlement agreement an order of court.
She drew attention
to the requirements set out in
Eke
v Parsons,
[12]
namely, that the settlement must relate directly or indirectly to an
issue or
lis
between the parties; that its terms must accord with both the
Constitution and the law; and that it must hold some practical or
legitimate advantage.
[28]
However, this cannot mean that the court’s discretion,
concerning whether to make the agreement an order of court, is
rendered nugatory.
There are a number of
cases that recognise the existence of such a discretion, although the
real scope of it has not been delineated
in any great detail.
[29]
The court in
PL v YL
went further than the paragraphs relied upon by the appellant and
referred to above. It stated:
‘…
.not
only does our substantive law favour the settlement of disputes by
way of a contract of compromise, it has always been the
practice of
the courts . . . to . . . assist the parties by making
settlement-based orders.
. . . .
That being said, it
must be accepted that there exists a need for the court to retain a
degree of control over agreements and consent
orders and for it to
scrutinise settlement agreements, the object in each case to
ascertain and make a determination whether the
terms thereof are
appropriate so as to be accorded the status of an order of the court.
It is however important to stress that
the court's role is of a
discretionary nature which should be exercised in light of all the
relevant considerations including the
benefits which the granting
thereof may hold for the parties, and the general judicial policy
favouring settlement. Each matter
should be considered on its own
merits. What it requires the court to do is to attempt to strike a
balance between the different
considerations relevant to the exercise
of its discretion.’
[13]
[30]
In
Eke,
the
Constitutional Court dealt with the principles set out in
PL
v YL
and referred in particular to the question of a court’s duty in
such cases:
[14]
‘
[
PL
v YL
] says . . . . “If one is
then to proceed from the premise that the wider interests under
consideration [are those] of the
administration of justice, then the
Court is required, when exercising its discretion whether to make a
settlement agreement an
order of the court, to give consideration not
only to the need to make orders that are readily enforceable, but
also to assess
the wider impact which its order may potentially
have.”
. . . .
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. . . .
. . . .
Secondly, [the agreement] must accord
with both the Constitution and the law. Also, they must not be at
odds with public policy.
. . .
The less
restrictive approach adopted in this judgment is 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 have the inherent power to protect and regulate
their own process, and to develop
the common law, taking into account
the interests of justice.”
This is what this Court has said about
inherent power: . . . “The power in s 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
” [emphasis added]. . . .
. . . .
[This] does not
mean any settlement order proposed by the parties should be accepted.
The court must still act in a stewardly manner
that ensures that its
resources are used efficiently. After all, its “institutional
interests . . . are not subordinate to
the wishes of the parties”.
Where necessary, it must “insist that the parties effect the
necessary changes to the proposed
terms as a condition for the making
of the order”. It may even reject the settlement outright.’
[15]
[31]
Froneman J, on behalf of the majority in
Airports
Company South Africa v Big Five Duty Free (Pty) Ltd
[16]
confirmed the principles emanating from
Eke
,
and in particular that ‘a settlement agreement between
litigating parties can only be made an order of court if it conforms
to the Constitution and the law’.
[32]
Our courts have a duty to ensure that they do not grant orders that
are
contra
bonos mores
,
or that amount to an abuse of process. Section 173 of the
Constitution specifically empowers the Court to prevent any such
abuses.
Thus, a court will not enforce a contract that is against
public policy. In
Fagan
v Business Partners Limited
the court held as follows:
[17]
‘
A
compromise, defined as a settlement of litigation or envisaged
litigation, is a substantive contract that exists independently
of
the original cause. . . . Stipulations in a contract which are
unconscionable, illegal or immoral will have the result that
a court
will refuse to give effect thereto.
A
contract or term of a contract may be declared contrary to public
policy if it is clearly inimical to the interests of the community,
or is contrary to law or morality, or runs counter to social or
economic expedience,
or is plainly
improper and unconscionable, or unduly harsh or oppressive. The
criteria upon which a contract may be declared contrary
to public
policy is thus not sharply defined and changes with “the
general sense of justice of the community, the
boni
mores
, manifested in public opinion”.’
[emphasis added]
[33]
As the full court in this matter held, a court cannot act as a mere
rubber stamp of the parties. The full court referred, inter
alia, to
the usual requirement that moneys should be paid into the Guardian’s
Fund or that a
curator
bonis
should be appointed. The draft order and settlement agreement did not
contain such provisions, which the court as upper guardian
of minors,
must take into consideration. The court also has a duty to members of
the public. Public funds are being disbursed and
the interests of the
community as a whole demand that more scrutiny be involved in the
disbursement of such funds. The criteria
are not as simple as the
appellant would have this court believe, as is apparent from
Fagan
.
[18]
The court’s duty extends further than considering only whether
the terms are illegal or immoral.
For
present purposes, however, it is not necessary for us to attempt to
circumscribe the precise ambit of that discretion. It is
better that
it is done on a case by case basis.
[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’.
[19]
[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.
[20]
In this case the judge had a legitimate concern that the only reason
for the settlement was the lack of preparation of the RAF’s
case and that there may, in truth, as appeared to be the case from
the evidence she heard from a passenger in the vehicle, have
been no
negligence on the part of the insured driver and thus no liability on
the part of the RAF.
[36]
Concern has been noted that to require a Judge to scrutinize every
settlement in a RAF case would cause delays in the administration
of
justice. However, it is not every case that will require this form of
judicial scrutiny. When a Judge expresses concern over
the terms of a
settlement, the court must ensure that those concerns are addressed
by the parties to prevent an abuse of process
and the unjustified
disbursements of public funds.
[37]
The agreement also lacked protection for the minor child, which the
court, as upper guardian, is entitled to insist upon. In
addition,
the clause dealing with costs is unintelligible and unenforceable. On
these grounds alone, a court would have been entitled
to refuse to
make the agreement an order of court.
[38]
This court is indebted to the amicus curiae, Advocate Zietsman, who
was asked to assist the court. He did so by filing heads
of argument
and making oral submissions at the hearing, for which we thank him.
Costs
[39]
The appeal herein is not opposed but the appellant sought costs from
the RAF. It was argued that the RAF, in stating to the
court a quo
that it was not satisfied with the agreement, was a cause of the
further proceedings. In my view, this submission cannot
be upheld and
accordingly no costs order will be made.
[40]
The following order is made:
1. The appeal is
dismissed.
2. There is no order as
to costs.
_____________________________
S
E Weiner
Acting
Judge of Appeal
Zondi
JA dissenting (Mocumie JA concurring)
[41]
I have read the judgment prepared by Weiner AJA. I regret that I
cannot agree with my colleague that the appeal should be dismissed.
[42]
In the judgment (paras 22 to 23) Weiner AJA concludes that the full
court was correct in holding that the relief sought in
prayers 1, 2
and 3 of the notice of motion was incompetent and that, in effect, it
amounted to reviewing the decision of the court
of first instance. I
also disagree with Weiner AJA’s conclusion that the failure of
the settlement agreement to provide safeguards,
regarding the
management of the funds that would be paid pursuant to settlement,
laid a sufficient basis for the court of first
instance to refuse to
make it an order of court. In fact, the inadequacy of the settlement
agreement was never advanced as a ground
of refusal.
[43]
I agree with the identification of the issues set out in para 9 of my
colleague’s judgment, namely first, whether it
was permissible
to challenge the court’s decision by way of the procedure
followed by the appellant; and, secondly, whether
the court’s
approach to the settlement agreement was permissible.
[44]
In my view, the answer to the first question should be in the
affirmative and the answer to the second question should be in
the
negative. In the result, I would uphold the appeal, set aside the
order of the full court, and grant the relief sought in prayers
3 and
4 of the notice of motion.
[45]
The background facts have been set out in detail in the judgment of
Weiner AJA. The appeal, with the special leave of this
Court, is
against the dismissal by the full court of the Limpopo Division of
the High Court, Polokwane of the appellant’s
appeal against the
judgment by Mokgohloa DJP dismissing the appellant’s
application. In that application, the appellant had
sought the
following relief:
‘
1. Calling off the part-heard
trial in the matter which commenced on Wednesday, 14 September 2016
and postponed for continuation
on Wednesday, 12 October 2016 at 10h00
in the forenoon.
2. That the said trial be and is
hereby forthwith annulled.
3. Declaring that the
lis
between
the Applicant and the Respondent which was to be the subject matter
of the trial which was to commence on Wednesday, 14
September 2016 at
10h00 in the forenoon before this Court under case number 1386/2015
to have been fully and finally settled between
the parties in terms
of the agreement and resultant draft order made and prepared by the
parties and bearing the same date of Wednesday,
14 September 2016.
4. That the draft order in paragraph 3
above is hereby made an order of the Court.
5. That the costs payable by the
Defendant in terms of paragraph 3 of the said draft order shall
include travelling costs, the costs
of this application and the
hearing of Wednesday, 12 October 2016, as well as the costs of Senior
Counsel where employed.’
[46]
This application was launched following the refusal by the Deputy
Judge President to make the settlement agreement an order
of court;
and directing that the trial should proceed despite the settlement
agreement having been concluded by the parties. The
basis of the
application is set out as follows in paras 19 and 20 of the
appellant’s founding affidavit.
‘
I am advised by my attorney
that after receipt of the instructions from her, Senior Counsel
appointed attended to the opinion and
advice required – he
opined and advised that the proceedings and trial as was required and
directed by the Presiding Judge
in the face of the agreement and
settlement between the parties as per the draft order were, with
respect, fatally flawed and irregular
in that the settlement
agreement in the form of the draft order represented a compromise and
contract between the parties which
has as its object the prevention,
avoidance or termination of the
lis
and litigation before the
Court with the further result that the Court, in the person of the
Presiding Judge, no longer has and
ceases to have the jurisdiction or
power to resume and continue to hear evidence and further pronounce
on the matter.
Put differently, the agreement as per
the draft order put paid to any and all existing issues and disputes
giving rise to the
lis
and litigation between the parties,
with the result that there is no longer a live issue between the
parties requiring evidence
and active adjudication by the Court.
Further legal argument in this regard will be presented before the
Court at the hearing of
the application.’
[47]
The court dismissed the application, holding that it was not obliged
to make the settlement an order of court since it was
not satisfied
that it was in accordance with the documents and pleadings filed of
record. The high court nevertheless granted the
appellant leave to
appeal to the full court.
[48]
The full court in para 3 of its judgment formulated the issue before
it in these terms:
‘
The appeal is mainly against
the dismissal of the main relief that the pending trial proceedings
before her is a nullity and that
the
lis
between the parties
had been settled. There is, therefore, in my judgment, no need to
decide whether the court ought not to have
taken cognizance of the
witness statements in the court file or that the order to continue
with the trial, despite the settlement,
was correct.’
[49]
In its view, the judge ‘was called upon in the motion
proceedings, to reconsider her earlier decision and to declare
her
order to continue with the trial after some evidence had been
adduced, a nullity’.
[50]
In accordance with its formulation of the issue, the full court
concluded that the relief sought by the appellant was incompetent
because ‘the proceedings before the deputy judge president have
not been concluded and are still pending’.
[21]
According to the full court, the procedure followed by the appellant
was flawed, because in terms of that procedure the presiding
judge
was called upon to review her own decisions in the motion
application. The primary means, the full court reasoned, to correct
a
judicial error by a judge who has made a final decision is by way of
an appeal to a higher court.
[51]
In my view, the full court misconstrued the nature of the appellant’s
application and the purpose of the relief that
the appellant was
seeking in that application. The suggestion that the appellant should
have followed the appeal procedure is not
correct, having regard to
the stage at which the proceedings were when the application was
launched. The proceedings which were
sought to be called off were
still pending and it would not have been in the interests of justice
for the parties to await the
completion of the proceedings before
taking any further steps. The relief that the appellant sought did
not depend for its consideration
on the outcome of those proceedings.
The parties, after agreeing to settle the dispute, were no longer
interested in engaging any
further in the legal proceedings.
Accordingly, they should not have been forced into the position to
risk incurring more legal
costs before their legal position as
regards the settlement could be authoritatively decided.
[52]
As the amicus curiae correctly pointed out in his heads of argument,
the appellant’s application had, as its aim, the
calling off of
the part-heard trial; declaring the trial to be forthwith annulled;
declaring the
lis
between the parties to have been fully and finally settled in terms
of the agreement and resultant draft order; and to make the
draft
order an order of court. That is essentially the relief that the
appellant sought. The procedure followed might not have
been without
difficulties. But to non-suit the appellant because of how she
presented her application, is to place form above substance.
[53]
It appears from the papers that, before the hearing of the
application, both counsel for the parties approached the judge to
persuade her to reconsider her earlier decisions. In this regard the
appellant says in para 23 of her founding affidavit:
‘
The purpose of . . . the
parties’ Counsel [approaching the Presiding Judge in chambers]
would be, as a matter of courtesy,
to informally suggest to the
Presiding Judge that the situation and matter be resolved or
rectified in a manner along the lines
of the relief as sought in the
notice of motion to which this affidavit is annexed, failing which
this substantive application
will be formally placed before the
Presiding Judge for hearing and decision.’
[54]
In my view, the relief sought in para 3 of the notice of motion,
viewed in the context of the application, the purpose to which
it was
directed, and the background to the application, was competent and
ought to have been granted; and so, too, the relief sought
in para 4
of the notice of motion.
[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
,
[22]
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:
[23]
‘
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:
“
(I)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”.’
[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.
[24]
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.
[61]
In my view, the relief sought by the appellant in prayers 3 and 4 of
the notice of motion was competent and should have been
granted.
[62]
In the result I would have made the following order:
1. The appeal succeeds.
2. The order of the full
court of the Limpopo Division of the High Court, Polokwane is set
aside and substituted with the following:
‘
(a) It is declared
that the
lis
between
the appellant and the respondent which was to be the subject matter
of the trial which was to commence on Wednesday, 14
September 2016
before the Limpopo Division, Polokwane under case number 1386/2015 to
have been fully and finally settled between
the parties in terms of
the agreement and resultant draft order made and prepared by the
parties and bearing the same date of Wednesday,
14 September 2016.
(b) The draft order
referred to in para (a) above is hereby made an order of the court.’
3 No order is made as to
costs.
___________________
D
H Zondi
Judge
of Appeal
Counsel
for Appellant: G Shakoane SC
Instructed
by: T F Ngobeni Attorneys Inc, Polokwane
Matsepes
Attorneys Inc, Bloemfontein
Counsel
for Respondent: None
Amicus
Curiae: P J J Zietsman
[1]
Referred to interchangeably as ‘Mohlehle’, ‘Mohlewe’,
and ‘Mahlenhle’ in the record.
[2]
PL
v YL
2013
(6) SA 28
(ECG) paras 14 and 25. (Footnotes omitted.)
[3]
Fischer
& another v Ramahlele & another
[2014] ZASCA 88
;
2014 (4) SA 614
(SCA) paras 13 and 14.
[4]
PL
v YL
2013
(6) SA 28
(ECG)
para 15, approved in
Eke
v Parsons
[2015]
ZACC 30
;
2016 (3) SA 37
(CC) para 25.
[5]
Eke
v Parsons
para
31.
[6]
Pretoria
Portland Cement Co Ltd v Competition Commission
2003 (2) SA 385
(SCA) paras 35-36.
[7]
It
was submitted by counsel that the trial had not come before the DJP,
but only been called in the roll call court, but that
was
inconsistent with the record which showed that it was allocated for
trial before her.
[8]
S
v Western Areas Ltd & others
[2005] ZASCA 31
;
2005 (1) SACR 441
(SCA) para 25. (Footnotes
omitted.)
[9]
Wahlhaus
& others v Additional Magistrate, Johannesburg & another
1959 (3) SA 113
(A) at 119D-E.
[10]
Ismail
& others v Additional Magistrate, Wynberg & another
1963
(1) SA 1
(A) at 5H.
[11]
‘6.12
SETTLEMENT
AGREEMENTS AND DRAFT ORDERS
6.12.1
Where the parties to a civil trial have entered into a settlement
agreement, a judge will only make such settlement agreement
an order
of court if:
6.12.1.1
Legal representatives representing all the parties to the trial are
present in court and confirm the signature of their
respective
clients to the settlement and that their clients want the settlement
agreement made an order of court; or
6.12.1.2
Proof to the satisfaction of the presiding judge is provided as to
the identity of the person who signed the settlement
agreement and
that the parties thereto want the settlement made an order of court.
.
. . .
6.12.3
Where the parties to a trial have settled before the trial date,
they will be entitled to remove the matter from the trial
roll and
enrol it on a special roll call for “Draft Orders” that
would be arranged by the Registrar.’
[12]
Eke
v Parsons
[2015]
ZACC 30
;
2016 (3) SA 37
(CC) paras 25 and 26.
[13]
PL
v YL
2013
(6) SA 28
(ECG) paras 37 and 41.
[14]
Eke
v Parsons
para
23, quoting from
PL
v YL
para
38. See also
Buffalo
City Metropolitan Municipality v Asla Construction (Pty) Ltd
[2019] ZACC 15.
[15]
Eke
v Parsons
paras
25-28, 34.
[16]
Airports
Company South Africa v Big Five Duty Free (Pty) Ltd
[2018]
ZACC 33
;
2019 (2) BCLR 165
(CC) para 13.
[17]
Fagan
v Business Partners Limited
2016 JDR 0317 (GJ) paras 19 and 26. (Emphasis added.) See also
Mzwakhe
v Road Accident Fund
[2017]
ZAGPJHC 342 paras 23-25.
[18]
Supra
.
[19]
Section
195(1)(
a)
and
(b)
of the Constitution.
[20]
Mzwakhe
v Road Accident Fund
[2017]
ZAGPJHC 342
paras 23-25.
[21]
Para
8 of the judgment of Muller J.
[22]
Eke
v Parsons
[2015]
ZACC 30
;
2016 (3) SA 37
(CC) paras 31-32. (Footnotes omitted.)
[23]
Eke
v Parsons
para
25. (Footnotes omitted.)
[24]
D
Pistorius
Pollak
on Jurisdiction
2
ed at 2.