THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 1136/2021
1137/2021
1138/2021
1139/2021
1140/2021
In the matters of:
THE ROAD ACCIDENT FUND Appellant in SCA Case No. 1139/2021
MARILYN DORIS TAYLOR First Appellant in SCA Case No. 1140/2021
HLENGANI VICTOR MATHONSI Second Appellant in SCA Case No. 1140/2021
DE BROGLIO ATTORNEYS INC. First Appellant in SCA Case No. 1136/2021
ZANDELEE DE SWARDT Second Appellant in SCA Case No. 1136/2021
IVAN BARRY KRAMER Appellant in SCA Case No. 1138/2021
MICHAEL VAN DEN BARSELAAR Appellant in SCA Case No. 1137/2021
In re GJ Case No. 37986/2018:
MARILYN DORIS TAYLOR Plaintiff in the Court a quo
and
THE ROAD ACCIDENT FUND Defendant
2
And in re GJ Case No. 13753/2019:
HLENGANI VICTOR MATHONSI Plaintiff in the Court a quo
and
THE ROAD ACCIDENT FUND Defendant
Neutral citation: The Road Accident Fund v Taylor and other matters (1136-
1140/2021) [2023] ZASCA 64 (8 May 2023)
Coram: SALDULKER, VAN DER MERWE and MEYER JJA and KATHREE-
SETILOANE and OLSEN AJJA
Heard: 20 February 2023
Delivered: 8 May 2023
Summary: Practice and procedure – final settlement of claim against Road Accident
Fund – compromise – extinguishes disputed rights and obligations and puts end to
litigation – has effect of res iudicata – court has no jurisdiction to enquire into whether
compromise justified on merits or validly concluded – power of court to make
compromise order of court on request.
3
ORDER
On appeal from: Gauteng Division of the High Court, Johannesburg (Fisher J, sitting
as court of first instance): Judgment reported sub nom Taylor v Road Accident Fund
2021 (2) SA 618 (GJ)
1 The appeals are upheld.
2 Paragraphs 1a to 1c and 1e of the order of the court a quo are set aside and
replaced with the following:
‘By agreement the matter is removed from the roll’.
3 Paragraphs 2a to 2c and 2e of the order of the court a quo are set aside and
replaced with the following:
‘By agreement the draft order presented to the court is made an order of court’.
JUDGMENT
Van der Merwe JA (Saldulker and Meyer JJA and Kathree -Setiloane and Olsen
AJJA concurring):
[1] This judgment deals with a number of extraordinary appeals. The appeals are
against the order of the Gauteng Division of the High Court, Johannesburg (Fisher J)
in respect of two actions against the Road Accident Fund (the RAF), after each of the
actions had been settled without proceeding to trial. Aspects of the order are appealed
by all the parties concerned, as well as by othe r persons affected by the order . The
appeals raise mainly two legal issues. The principal issue concerns the consequences
of the settlement of disputed issues in litigation and the powers of a court in relation
thereto. A subsidiary issue relates to the rights of a person who is not a p arty to legal
proceedings, but whose conduct is referred to the statutory body or institution
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responsible for oversight over the members of the profession that the person belongs
to. The appeals came to this court in the manner set out below.
The RAF
[2] The RAF is a juristic person established under s 2 of the Road Accident Fund
Act 56 of 1996 (the RAF Act). In terms of s 3 of the RAF Act, the object of the RAF is
the payment of compensation for loss or damage wrongfully caused by the driving of
motor vehicles. The RAF is publicly funded in accordance with ss 5 and 6 of the RAF
Act. Section 10 of the RAF Act provides for a board of the RAF. Its powers and
functions, in terms of s 11, are to exercise overall authority and control over the
financial position, operation and management of the RAF, subject to the powers of the
Minister of Transport. The board is also empowered to appoint a chief executive
officer, to whom it may delegate any of its powers or duties.
[3] Section 4(1) of the RAF Act provides:
‘The powers and functions of the Fund shall include-
(a) . . .
(b) the investigation and settling, subject to this Act, of claims arising from loss or damage
caused by the driving of a motor vehicle whether or not the identity of the owner or the driver
thereof, or the identity of both the owner and the driver thereof, has been established;
(c) the management and utilisation of the money of the Fund for purposes connected with
or resulting from the exercise of its powers or the performance of its duties; and
(d) . . .’
In terms of s 15(1) (a) the RAF may institute and def end legal proceedings. Section
15(1)(b) provides that the RAF may ‘commence, conduct, defend or abandon legal
proceedings in connection with claims investigated and settled by it’.
The Taylor matter
[4] During September 2018, Ms Marilyn Doris Taylor, represented by De Broglio
Attorneys Incorporated (De Broglio Inc), instituted an action against the RAF. She
alleged that she had sustained injuries in a motor vehicle accident, which entitled her
to compensation under the RAF Act in respect of, inter alia, future loss of earnings,
pain and suffering, disfigurement, inconvenience and loss of amenities of life (general
damages). The RAF entered an appearance to defend the action. In due course, De
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Broglio Inc t herefore delivered various expert reports. These included reports
assessing the seriousness of Ms Taylor’s injuries prepared by a general practitioner
(Dr Kevin Scheepers), as well as the medico-legal reports of an orthopaedic surgeon,
occupational therapist and industrial psychologist. It also delivered the report of an
actuary, Mr Ivan Kramer. This report typically reflected actuarial calculations of future
loss of earnings based on information that had been provided to the actuary.
[5] The matter was enrolled for trial for 12 October 2020. By then negotiations for
a settlement had commenced. De Broglio Inc assigned a candidate attor ney in its
employ, Ms Zandelee d e Swardt, to deal with the matter and briefed counsel, Mr
Michael van den Barselaar, t o represent Ms Taylor at the trial. On 13 October 2020,
the matter was allocated to Fisher J. Subsequently, however, Ms Taylor accepted an
offer by the RAF in full and final settlement of her claims. The settlement inter alia
provided that the RAF would pa y compensation to Ms Taylor in the amount of R1.3
million.
[6] In the light hereof, the parties approached Fisher J on 14 October 2020, for an
order removing the matter from the roll. At the insistence of Fisher J, the senior claims
manager of the RAF, w ho had approved the settlement, attended the hearing. In
answer to questions by Fisher J, he told the court that he was an admitted attorney
with 19 years’ experience in the field and explained how the settlement came about.
Despite a valiant effort by Mr Van den Barselaar to obtain the order that both parties
sought, the court was unmoved. It appeared that this stance was motivated by
concerns about the propriety of the settlement amount of R1.3 million.
[7] Ultimately Fisher J pos tponed the matter to 3 November 2020 and directed
that argument be presented on that day on four questions, formulated as follows:
‘(a) Is there a settlement in this case of the claim on behalf of the Plaintiff?
(b) Is the RAF entitled to settle a matter with a plaintiff without judicial approval of a
settlement?
(c) If the answer to (b) is yes then are there any limitations or requirements in relation to
such settlement?
(d) Is the fact that the matter is on the roll before a judge an indicator that the C ourt may
exercise judicial oversight to determine if a settlement is proper?’
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The Mathonsi matter
[8] Mr Hlengani Victor Mathonsi also sustained injuries caused by the driving of a
motor vehicle. He accordingly issued summons against the RAF for payment o f
compensation in respect of, inter alia, future loss of earnings and general damages.
Mr Mathonsi was also represented by De Broglio Inc. The RAF defended the action.
De Broglio Inc proceeded to deliver serious injury assessment reports prepared by Dr
Scheepers, as well as the medico-legal reports of an orthopaedic surgeon,
occupational therapist and industrial psychologist. It also delivered an actuarial report
prepared by Mr Kramer, similar to the one in the Taylor matter.
[9] The matter was set down for trial on 14 October 2020. On 15 October 2020, it
was also allocated to Fisher J. By that time, however, the matter had become settled.
The parties prepared a draft order that reflected the settlement of the action. It, inter
alia, provided for payment of compensation in the amount of R1 775 360.35 to Mr
Mathonsi. The parties agreed that the court be requested to make the draft order an
order of court. When the matter was called before Fisher J on 15 October 2020,
counsel for Mr Mathonsi (Mr Motala) asked for such an order.
[10] The court did not, however, address the request of the parties. Instead, it raised
certain procedural issues. These were: why the discovery affidavit had not been
‘commissioned’; whether the particulars of claim had been properly amended; and why
the affidavit of a general practitioner had been signed but not ‘commissioned’. Fisher
J postponed this matter to 3 November 2020 as well, for argument on these procedural
issues.
Hearing and judgment
[11] At the hearing of the Taylor matter on 3 November 2020, senior counsel for Ms
Taylor and the RAF respectively, were in agreement on all four of the questions that
had been referred for argument. They agreed that:
(a) There had been a settlement of the Taylor matter and there was no longer a lis
between the parties;
(b) The RAF was entitled to settle with a plaintiff without judicial approval of such
settlement;
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(c) There were no statutory limitations or requirements in relation to the settlement
of a claim by the RAF; and
(d) It was irrelevant whether a matter had been on the roll before a particular judge
when it became settled.
In the result, both parties asked for an order removing the matter from the roll.
However, Fisher J had ‘secured the appointment of an amicus curiae’ (Ms Hassim
SC), who put forward opposing contentions.
[12] After the hearing of the Taylor matter on 3 November 2020, the court reserved
judgment and the Mathonsi matter was called. Only Mr Matolo appeared in the
Mathonsi matter. He addressed the aforesaid procedural issues and moved for the
draft order to be made an order of court. He was not called upon to address any other
issue. The court reserved judgment in this matter as well.
[13] On 16 November 2020, Fisher J handed down a single judgment dealing with
both the Taylor and Mathonsi matters. The wide-ranging judgment paid scant attention
to the questions that had been referred to argument in the Taylor matter and did not
mention those in the Mathonsi matter. Instead, it addressed two broad themes.
[14] The first concerned the viability of the RAF as such. The court held that: the
RAF was unable to pay its debts when they fell due and was thus bankrupt; the present
system was ‘unworkable, unsustainable and corrupt ’; and a viable alternative had to
be found if the RAF was to perform its statutory function. This led Fisher J to offer the
following advice:
‘In my view, the fund should be liquidated and/or placed under administration as a matter of
urgency. This is the only way that this haemorrhage of billions of rands in public funds can be
stemmed and proper and valid settlement of the plaintiff’s claims be undertaken in the public
interest. I have asked that this judgment be brought to the attention to the Minister of Transport,
the Acting Chief Executive Officer of the Road Accident Fund, and the National Director of
Public Prosecutions.’
[15] The second, more pertinent, theme was that the Taylor and Mathonsi matters
were but instances of widespread exploitation of the RAF. In this regard the court
concluded:
8
‘From these two cases, and others which I have heard, a modus operandi emerges as follows:
A r elatively modest claim is brought and the Case Management Court process is
undertaken on these pleadings.
In the actuarial calculation, the income of the plaintiff pre-accident is inflated and/or the
aspirations of the plaintiff are exaggerated or even fab ricated in order to suggest a
career progression when there is none.
These fallacious assumptions are used by the actuary to calculate a loss of earning
capacity which yield significantly inflated figures because of the exponential nature of
the calculation.
This actuarial report is then used as a basis for an amendment of the claim without any
oversight.
The RAF is not represented and is overwhelmed by the sheer volume of cases and/or
the officials are pliable. They thus place undue reliance on the repr esentations of the
plaintiff’s attorney as to the loss.
As to general damages, under -qualified and sometimes pliable doctors are used to
suggest the injuries are more serious than they, in fact, are.’
[16] Part of this general modus operandi, so the court said, was to avoid judicial
scrutiny of the settlement agreements. It stated:
‘What is of most concern, is that these two cases are not isolated instances, but are examples
of a general approach which most courts are met with daily in their attempts at fostering and
maintaining judicial oversight in the RAF environment. These cases expose defiant attempts
by legal representatives to avoid judicial scrutiny of settlements entered into with the RAF
under circumstances which are strongly suggestive of dishonesty and/or gross incompetence
on the part of those involved.’
[17] The court said that De Broglio Inc did not stand alone in its approach consisting
of ‘tactics’ that had to be contrasted with behaving ‘in a manner which embraces
openness and honesty’. It also said:
‘Whilst De Broglio might believe that it has served the interests of its clients and itself in
achieving a settlement agreement for a grossly inflated amount in circumstances where it has
avoided this Court’s jurisdiction, in fact it has placed them in jeopardy.’
In relation to the Mathonsi matter, the court said that the reports of Dr Scheepers and
Mr Kramer had been ‘employed to dubious end’ and that its general sense was that
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the matter had been dealt with in a ‘dishonest and cavalier manner’. In the ir context
these remarks could only relate to De Broglio Inc.
[18] With regard to the conduct of the legal representatives of Ms Taylor, the court
stated that the proposal that had been made to the RAF, ‘constituted, on the face of it,
a deliberate misrepresentation of the claim and the evidence available to prove it’. It
held:
‘There can, in my view, be no doubt that Mr van den Barselaar and Ms de Swardt were both
well aware of the force of the contents of the Proposal in the context of the settlement
engagement and the representations made therein.’
It proceeded to say:
‘To my mind the approach adopted by the plaintiff’s legal representatives is nothing more than
sleight of hand. There is no evidence that Ms Taylor lost her job as a result of the accident;
the use of Mr Kramer’s actuarial calculation as a basis of the amended claim bears no scrutiny;
and Ms Taylor does not qualify for general damages on her own case. And yet, through the
machinations of Ms de Swardt of De Broglio and Mr van den Barselaar an offer of R1 300 000
was extracted from the RAF.’
[19] Fisher J thus held that De Broglio Inc, Ms De Swardt and Mr Van den Barselaar
had: dishonestly misrepresented the facts of the Taylor matter to the RAF; thus
extracted a grossly inflated settlement offer from the RAF; and sought to avoid judicial
scrutiny of the consequent settlement agreement.
[20] Even the actuary, Mr Kramer, was not spared. Fisher J said that Mr Kramer’s
calculations in the Taylor matter had been made on the basis of a ‘patently false’
assumption as to Ms Taylor’s income. The implication of the judgment was that this
was deliberate. This is evidenced by the court’s reference to ‘Mr Kramer’s contrived
report’.
[21] Under the heading ‘The effect of the purported settlements’, the court said:
‘The commencement, defence and conduct of litigation by organs of state constitutes the
exercise of public power. It must be done in a c onstitutionally compliant manner upholding
legality and the rule of law. The RAF has chosen to ignore this Court’s pointed concerns and
instead of insisting on an order of Court as a precondition to its settlement, which would be
10
the rational approach it has chosen to acquiesce in the tactic adopted by De Broglio on behalf
of the plaintiff. That the RAF is conducting its business in this reckless manner under insolvent
circumstances is of great concern to this Court.
What is clear in relation to these two c ases is that the RAF officials did not act lawfully to
conclude the settlements and for this reason they are void ab initio. Thus on this issue, I agree
with Ms Hassim that there is no settlement.’
[22] The judgment nevertheless concluded as follows:
‘To the extent that the settlements are unconstitutional they are unenforceable. And if payment
is made pursuant thereto this would constitute irregular expenditure by the RAF and potentially
make those approving such payments vulnerable to personal scrutiny by the Courts. The RAF
is a public entity, as contemplated in Part A of Schedule 3 of the Public Finance Management
(PFMA) and is therefore subject to the onerous prescripts relating to public expenditure set
out in the PFMA. Thus, without further collu sion by the RAF in relation to payment, the
settlements are, in effect, worthless.’
[23] The following order was issued:
‘1. In case 37986/2018 Taylor v RAF the following order is made:
a. The matter is postponed sine die.
b. This judgment is to be brought to the attention of any court called upon to enforce the
purported settlement agreement.
c. The conduct of De Broglio Inc, Ms de Swardt, and Mr van den Barselaar is referred to
the Legal Practice Counsel.
d. The conduct of Dr Kevin Scheepers in this matter is referred to the Health Professions
Council of South Africa (HPCSA).
e. The conduct of Mr Ivan Kramer is referred to the Actuarial Society of South Africa.
2. In case 13753/2019 Mathonsi v RAF the following order is made:
a. The matter is postponed sine die.
b. This judgment is to be brought to the attention of any court called upon to enforce the
purported settlement agreement.
c. The conduct of De Broglio Inc is referred to the Legal Practice Counsel.
d. The conduct of Dr Kevin Scheepers in this matter is referred to the HPCSA.
e. The conduct of Mr Ivan Kramer is referred to the Actuarial Society of South Africa.
3. A copy of this judgment is to be delivered to:
a. the Minister of Transport;
b. the Acting Chief Executive Officer of the Road Accident Fund; and
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c. the National Director of Public Prosecutions.
4. Each party shall pay their own costs.’
Appealability
[24] Ms Taylor applied for leave to appeal against paras 1a and 1b of the order. Mr
Mathonsi applied for leave to appeal against paras 2a and 2b of the order. The RAF
applied for leave to appeal against all of these paras of the order (collectively the
postponements). De Broglio Inc, Ms De Swardt, Mr Van den Barselaar and Mr Kramer
(the affected persons) separately applied for leave to intervene and for leave to appeal
against the respective paragraphs of the order that affected them (collectively the
referrals). (Dr Scheepers did not challenge the orders that affected him).
[25] The court dismissed the applications for leave to appeal of Ms Taylor, Mr
Mathonsi and the RAF, on the ground that it had made no appealable order in respect
of these parties. The court also dismissed the applications for intervention. On this
basis, the applications of the affected persons for leave to appeal, fell away. It is no t
easy to fathom the reasons for refusing leave to intervene. It would appear, however,
that the court reasoned that the affected persons purported to attack findings and not
orders and that the referrals were not final orders. Subsequently, however, this court
granted each of the parties and affected persons the leave to appeal to this court that
they had sought.
[26] That leave to appeal was granted, is only one of the two requirements for this
court to have jurisdiction to entertain an appeal. The other requirement is that the order
sought to be appealed against is a ‘decision’ within the meaning of s 16(1) (a) of the
Superior Courts Act 10 of 2013. Not only traditional final judgments are such decisions.
It has become settled law that an order could qualify as an appealable decision if it
has a final and definitive effect on the proceedings or if the interests of justice require
it to be regarded as an appealable decision. What the interests of justice require is not
determined by a closed list of co nsiderations, but depends on the facts and
circumstances of each case. However, whether an appeal would lead to a just and
expeditious determination of the essence of the matter, is an important consideration
12
in deciding whether an order should be regarded as an appealable decision. See
DRDGOLD Limited and Another v Nkala and Others [2023] ZASCA 9 paras 17-27.
[27] For the reasons that follow, I have no doubt that the postponements are
appealable decisions. First, one must have regard to three factors:
(a) The finding that the settlement agreements are void ab initio;
(b) The finding that, ‘without further collusion by the RAF in relation to payment,
the settlements are, in effect, worthless’; and
(c) The terms of the postponements, namely that each matter is postponed sine
die with the directive that the judgment of the court a quo is to be brought to the
attention of any court called upon to enforce ‘the purported settlement agreement’.
[28] The combined effect of these factors is that the parties are unable to execute
the settlement agreements that they firmly regard as binding on them. They cannot
move forward or backward in this regard and are stuck in no-man’s land, as it were. In
substance, the postponements therefore have a final and definitive effect on the
respective proceedings. Secondly, successful appeals would bring these matters to
finality. Thus it is in any event in the interests of justice to entertain these appeals.
[29] As to the appealability of the referrals, it suffices to say that the facts and
circumstances that I shall allude to shortly, indicate that the interests of justice require
that they be corrected forthwith and that the affected persons should not be required
to await the outcome of the proceedings before the respective professional bodies.
See Beinash v Wixley 1997 (3) SA 721 SCA at 729H-730E.
Analysis
[30] Before I turn to the legal issues that I have identified at the outset, I am
constrained to say the follo wing. Whilst Fisher J’s industry cannot be faulted, it
regrettably has to be said that not a single finding that she made had been open for
her to make . Moreover, these findings were made without any admissible evidence.
The findings in respect of the viability of the RAF, were mainly based on an affidavit of
the acting chief executive officer of the RAF in another matter and the 2019 annual
report of the RAF. The findings in respect of the settlement agreements and the
13
conduct of the affected persons, were based on the unspecified knowledge of the
judge of the facts and circumstances o f other matters and the pleadings and expert
reports in the court files. It is trite that none of this cons tituted evidence before the
court. Therefore it is unnecessary to consider whether the judgment in any event
disclosed tenable reasoning in respect of any of these findings. Thus, the judge
decided non -issues without evidence, to the detriment of all conce rned. This
injudicious overreach has to be strongly deprecated.
[31] Where the misappropriation of public funds is properly raised before a court, it
must, of course, deal with it decisively and without fear, favour or prejudice. But a court
has no gen eral duty or power to exercise oversight over the expenditure of public
funds. This is so for three main reasons. The first is the constitutional principle of
separation of powers. The second is that the exercise of such a duty or power would
infringe the constitutional rights of ordinary citizens to equality and to a fair public
hearing. The third is the principle that the law constrains a court to decide only the
issues that the parties have raised for decision. See Magistrates Commission and
Others v Lawrence [2021] ZASCA 165; 2022 (4) SA 107 SCA para 78-79. A perception
that a system of state administration is broken, is not a licence to disregard
fundamental principles of procedural or substantive law.
The referrals
[32] It is convenient to commen ce with a consideration of the appeals against the
referrals. They were based on the findings of dishonesty and impropriety on the part
of the affected persons that I have referred to. The referrals are inextricably linked to
these findings. The judgment o f the court a quo was forthwith made available
electronically and subsequently published in the law reports. In the nature of things, it
would have spread like wildfire in the relevant communities. There can be no doubt
that the referrals had and continue to have grave reputational and practical
consequences for the affected persons.
[33] In the circumstances, the age-old principle of audi alteram partem required that
the affected persons be afforded reasonable prior notice and opportunity to state their
cases. In De Beer NO v North-Central Local Council and South-Central Local Council
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and Others (Umhlatuzana Civic Association intervening) 2002 (1) SA 429 (CC) para
11, the following was said with particular reference to s 34 of the Constitution:
‘This s 34 fair hearing right affirms the rule of law which is a founding value of our Constitution.
The right to a fair hearing before a court lies at the heart of the rule of law. A fair hearing before
a court as a prerequisite to an order being made against anyone is fundamental to a just and
credible legal order. Courts in our country are obliged to ensure that the proceedings before
them are always fair. Since procedures that would render the hearing unfair are inconsistent
with the Constitution courts must interpret legislation and rules of court, where it is reasonably
possible to do so, in a way that would render the proceedings fair. It is a crucial aspect of the
rule of law that court orders should not be made without affording the other side a reasonable
opportunity to state their case. . .’
[34] The affected persons were not afforded any such notice or opportunity. It
follows that the findings and referrals were made in complete disregard of the rights of
the affected persons. The referrals are manifes tly unjust, cannot stand and must be
set aside at this stage.
The postponements
[35] The settlement agreements in the Taylor and Mathonsi matters are final and
unconditional compromises. There is no indication that a contingency fee agreement
was involved in these matters. Thus, the general principles relating to a compromise
are applicable to them.
[36] The essence of a compromise (transactio) is the final settlement of disputed or
uncertain rights or obligations by agreement. Save to the extent that the compromise
provides otherwise, it extinguishes the disputed rights or obligations. The purpose of
a compromise is to prevent or put an end to litigation. Our courts have for more than
a century held that, irrespective of whether it is made an order of court, a compromise
has the effect of res iudicata (a compromise is not itself res iudicata (literally ‘a matter
judged’) but has that effect).
[37] Because, as I shall show, the majority in Maswanganyi v Road Accident Fund
[2019] ZASCA 97; 2019 (5) SA 407 SCA ( Maswanganyi), did not follow these
principles, it is necessary to make rather extensive reference to the judgments which
15
have enunciated these principles. A convenient starting point is Cachalia v Harberer
& Co 1905 TS 457 (Innes CJ and Solomon and Mason JJ). There a settlement of an
action in the magistrate’s court was not entered upon the record. The plaintiff’s
subsequent claim against t he defendant on the original contract, was met by the
defence that it was precluded by the settlement agreement. The court upheld th e
defence in these terms:
‘Now does it make any difference that no judgment was entered at the time, and that this
settlement was merely a settlement between the parties which was not entered in the records
of the court? The authorities seem to me clear that this does not make any difference, that a
transactio may be either a judicial one, which is entered in the records of the court, or may be
extra-judicial, but that the effect is the same. A compromise whether embodied in a judgment
of the court or extra -judicial has the effect of res judicata, and is an abs olute defence to an
action on the original contract.’
[38] In Western Assurance Co v Caldwell’s Trustee 1918 AD 262 at 270, Innes CJ
referred to the common law and proceeded to say:
‘According to that law a transactio, if established and valid, is an absolute defence to the action
compromised. It has the effect of res judicata.’
The next important case is Estate Erasmus v Church 1927 TPD 1. The full bench (at
25-26) extensively referred to common law authorities, had regard to Cachalia v
Harberer and Western Assurance and concluded:
‘The object therefore of a compromise is to end, or to destroy, or to prevent a legal dispute.
The effect of a compromise is res judicata; and, according to Domat, the effect is even stronger
than that of a judgment inasmu ch as, unlike in the case of judgments, the parties have
consented to the terms on which they intend to compromise.’
[39] These dicta have repeatedly been approved by this court. See Van Zyl v
Niemann 1964 (4) SA 661 AD at 669H and, in particular, Gollach & Gomperts (1967)
(Pty) Ltd v Universal Mills & Produce Co (Pty) Ltd and Others 1978 (1) SA 915 AD at
921A-D and 922C. See also Moraitis Investments (Pty) Ltd and Others v Montic Dairy
(Pty) Ltd and Others [2017] ZASCA 54; 2017 (5) SA 508 SCA para 14 and Watson
NO v Ngonyama and Another [2021] ZASCA 74; 2021 (5) SA 559 (SCA) para 60. In
Hlobo v Multilateral Motor Vehicle Accidents Fund 2001 (2) SA 59 (SCA) para 10, it
was stated that our courts encourage parties to deal with their disputes by way of
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compromise. This court proceeded to say, with reference to Estate Erasmus v Church,
that when concluded, such a compromise disposes of the proceedings. The
culmination of all of this, for purposes of this judgment, as stated in Legal-Aid South
Africa v Magidiwana and Others [2014] ZASCA 141; 2015 (2) SA 568 SCA para 22, is
that once ‘the parties have disposed of all disputed issues by agreement inter se, it
must logically follow that nothing remains for a court to adjudicate upon or determine’.
[40] When requested to do so, a court has the power to make a compromise, or
part thereof, an order of court. This power must, of course, be exercised judicially, that
is, in terms of a fair procedure and with regard to relevant considerations. The
considerations for the determination of whether it would be competent and proper to
make a compromise an order of court, are threefold. They are set out in Eke v Parsons
[2015] ZACC 30; 2016 (3) SA 37 (CC) paras 25-26 (Eke v Parsons).
[41] The first consideration is whether the compromise relates directly or indirectly
to the settled litigation. An agreement that is unrelated to litigation, should not be made
an order of court. The second is whether the terms of the compromise are legally
objectionable, that is, whether its terms are illegal or contrary to public policy or
inconsistent with the Constitution. Such an agreement should obviously not be made
an order of court. The third consideration is whether it would hold some practical or
legitimate advantage to give the compromise the status of an order of court. If not, it
would make no sense to do so.
[42] The relevant issue in Eke v Parsons was whether a settlement agreement that
had been made an order of court, was final in its terms and whether the other party
was entitled to approach a court for the enforcement of the order in accordance with
the procedure set out therein. The Constitutional Court therefore did not consider the
nature and effect of a compromise and did not bring about any change to the law in
that regard. Importantly, however, the judgment makes clear (paras 8, 19 -24 and 27-
28) that the power to make a compromise an order of court, is derived from a long -
standing practice aimed at assisting the parties to give effect to their compromise. The
clear import of Eke v Parsons therefore is that this power is not derived from the
jurisdiction of the co urt over the issues that had been raised before it, but were
17
subsequently settled. In making a compromise an order of court, the court plainly does
not determine the issues that the compromise settled. Unless a compromise is
conditional upon it being made an order of court, the fact that a court declines to do
so, in itself, has no effect on the enforceability of the compromise inter partes.
[43] This brings me back to Maswanganyi. In that matter, the appellant sued the
RAF on behalf of her minor child for loss of support. She alleged that the death of the
child’s father had been caused by the negligence of the driver of a vehicle that collided
with the vehicle driven by the deceased. The RAF defended the action and the matter
was set down for trial. Prior to the commencement of the trial, the parties settled the
action. They accordingly requested the judge to whom the trial had been allocated, to
make their settlement agreement an order of court.
[44] The judge refused to do so, on the basis that the pleadings and certain witness
statements (which must have been in the court file), did not indicate any negligence
on the part of the other driver. The judge required witnesses to tes tify and a witness
commenced his testimony before the trial was postponed. Prior to the date on which
the trial was to resume, the appellant launched an application for, essentially, a
declarator that the lis between the parties had been fully and finally settled and for an
order making the settlement agreement an order of court. The court refused the
application. The appellant unsuccessfully appealed to the full court. Her further appeal
came to this court with its special leave.
[45] On appeal the minority (Zondi JA, Mocumie JA concurring) would have upheld
the appeal and would have granted the relief that the appellant had sought. On the
issue that is relevant to this judgment, the minority held that the views of the trial judge
as to the merits of the action, were irrelevant and that, on an application of the
guidelines in Eke v Parsons , the settlement agreement should have been made an
order of court.
[46] The majority differed. It stated that there were two issues for decision in the
appeal. The first was whether it was procedurally permissible to challenge the court’s
decision (to refuse to make the settlement agreement an order of court and to direct
18
that the trial proceed) in the aforesaid manner. The second issue, concerning the
permissibility of the approach of the trial court to the settlement agreement, so the
majority said, would only be reached should the first issue be decided in favour of the
appellant. Although it proceeded to decide the first issue against the appellant, it found
it necessary to make ‘some remarks’ about the second issue. The majority expressly
recognised, however, that these remarks (paras 25 -37) were obiter. I therefore need
not say anything about them.
[47] Nevertheless, the rationes decidendi of the majority in respect of the first issue,
included the following dicta (paras 15-16):
‘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”.
. . . 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.
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 iss ues
litigated between the parties.’
[48] It is apparent that this passage contradicts:
(a) The common law principles that a compromise extinguishes disputed issues
and puts an end to litigation;
(b) The decisions of this court that a compromise has the effect of res iudicata; and
(c) The import of Eke v Parsons, namely that the power to make a compromise an
order of court arises from a long-standing practice and not ‘from the jurisdiction of the
court to resolve the pleaded issues’ or ‘the court’s jurisdiction to adjudicate upon the
issues in the litigation’.
[49] The majority had no regard to these common law principles. In the absence of
development of the common law, the court was bound to apply them. Unless it
determined that they were clearly wrong, the court was bound by the decisions of this
19
court that I have referred to. See Steve Tshwete Local Municipality v Fedbond
Participation Mortgage Bond Managers (Pty) Ltd and Another [2013] ZASCA 15; 2013
(3) SA 611 SCA para 14. The majority also did not consider any of these decisions.
Although it referred to Eke v Parsons, it failed to have regard to its impact on the issues
under consideration. On these issues, I regret to say, the judgment of the m ajority in
Maswanganyi is clearly wrong and should not be followed.
[50] The court a quo referred to a practice directive that had been issued on 2
October 2019, which appears to run contrary to this judgment, in that it provides for a
judge to ‘interrog ate’ the circumstances under which a settlement agreement was
entered into. The meaning of the portion of the practice directive, as quoted in the
judgment of the court a quo, is quite unclear. As we have insufficient evidence in
respect of its status, scope of application and context, I am loath to express a firm view
on this practice directive. It suffices to say that to the extent that this (or any other)
practice directive is in conflict with this judgment, it is invalid. See Mhlongo and Others
v Mokoena NO and Others [2022] ZASCA 78; 2022 (6) SA 129 (SCA) para 14.
[51] To sum up, when the parties to litigation confirm that they have reached a
compromise, a court has no power or jurisdiction to embark upon an enquiry as to
whether the compromise was justified on the merits of the matter or was validly
concluded. When a court is asked to make a settlement agreement an order of court,
it has the power to do s o. The exercise of this power essentially requires a
determination of whether it would be appropriate to incorporate the terms of the
compromise into an order of court.
[52] It follows that the court a quo should have removed the Taylor matter from the
roll. There was no legitimate reason for refusing to make the draft order in the Mathonsi
matter an order of court. The appeals of the RAF, Ms Taylor and Mr Mathonsi must
therefore also succeed.
[53] In the result the following order is issued:
1 The appeals are upheld.
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2 Paragraphs 1a to 1c and 1e of the order of the court a quo are set aside and
replaced with the following:
‘By agreement the matter is removed from the roll’.
3 Paragraphs 2a to 2c and 2e of the order of the court a quo are set aside and
replaced with the following:
‘By agreement the draft order presented to the court is made an order of court’.
________________________
C H G VAN DER MERWE
JUDGE OF APPEAL
21
Appearances
For the RAF: M Antonie SC with M V J Chauke
Instructed by: Mpoyana Ledwaba Inc Attorneys ,
Pretoria
Modisenyane Attorneys Inc ,
Bloemfontein
For Ms Taylor & Mr Mathonsi: A P Joubert SC with J M Killian
Instructed by: De Broglio Attorneys Inc,
Johannesburg
Matsepes Inc, Bloemfontein
For De Broglio Inc & Ms de Swardt: J G Wasserman SC with E F
Serfontein
Instructed by: De Broglio Attorneys Inc,
Johannesburg
Matsepes Inc, Bloemfontein
For Mr Kramer: A P Joubert SC with N J Horn
Instructed by: Bove Attorneys Inc, Johannesburg
Lovius Block, Bloemfontein
For Mr Van den Barselaar: P Stais SC
Instructed by: RFI Attorneys, Johannesburg
Honey Attorneys Inc, Bloemfontein