RAF’s Cape Town branch in danger of ‘collapsing’

The dismissal with costs of a high court attempt by the Road Accident Fund (RAF) to suspend the removal of its attached assets – a move arising from its failure to pay the settlement agreement claim of an illegal foreigner – means its Cape Town branch is in danger of “collapsing”.

The RAF brought an urgent application against the Cape Town West sheriff, a claimant’s attorneys Kruger & Co, and claimant Fillis Chitandara, seeking that:

• The writ of execution issued by Kruger & Co be stayed and operate as interim relief pending the Supreme Court of Appeal (SCA) hearing of an appeal by the RAF against the judgment in a case brought by Mudawo and others versus the Minister of Transport and the RAF; and
• An order in this case not be issued subject to a rescission application by the RAF of the Mudawo judgment, which is still to be launched.

This is a reference to an application brought by foreign nationals Adam Mudawo, Wenile Simon Ndlovu, Bruce Mthokozi Sibanda and Oyetunde Oneniyi Areo to review and set aside a Department of Transport (DoT) regulation and RAF management directive that attempted to exclude foreigners who are illegally in South Africa from submitting claims against the fund.

Judge Norman Davis, with acting judges BF Mnyovu and A Kok concurring, in March 2023 declared the DoT regulation and RAF management directive invalid.

In July 2023 they dismissed with costs an RAF application for leave to appeal this judgment, with an appeal against this judgment now set to be heard by the SCA.

The RAF claimed in its application against the Cape Town West sheriff, Kruger & Co and Chitandara that once the legal position is pronounced by the SCA, it will result in the RAF having to attempt to undo the current court order by way of a rescission or appeal.

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The judgment

Acting Judge Pearl Andrews said in a judgment handed down late last month that the RAF claimed the urgency for this application was created by the insistence by Kruger & Co and Chitandara on proceeding with the attachment of the RAF’s assets – despite being provided with documents reflecting that Chitandara was an illegal foreigner and appears to have committed fraud.

She said the RAF said it has an obligation to protect public funds provided to it and claimed the removal of the assets will have the effect of “collapsing” the RAF’s Cape Town branch.

The RAF said the fund was not designed and intended to benefit people who are in South Africa illegally and neither to accommodate claims that are fraudulent in nature.

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The claim

Chitandara’s minor child was involved in an accident on 17 January 2021 and Kruger & Co filed her lodgement documents related to the injuries sustained by her child on 8 December 2022.

These documents also included a document named Formal Recognition of Refugee Status in the Republic of South Africa (RSA), with Kruger & Co lodging a copy of Chitandara’s passport without including the pages containing the border control stamps entry.

The RAF offered to settle the claim, which Chitandara accepted on 24 August 2023, and the settlement agreement was made an order of court on 29 November 2023.

Acting Judge Andrews said a statement requested by the RAF in October 2024 from the Department of Home Affairs revealed that Chitandara was not legally in the country at the time of the accident and also exposed that the Formal Recognition of Refugee Status in the RSA document provided by her to the RAF was not issued by the Department of Home Affairs and is a fraudulent document.

Kruger & Co and Chitandara argued that even in the event of the Mudawo appeal being successful, such an outcome cannot have any legal effect on the settlement agreement because:

• It is a contract, the purpose of which is to prevent or put an end to litigation;
• It is a substantive contract which exists independently of the cause that gave rise to the compromise;
• It may only be set aside on the ground that it was fraudulently obtained on the ground of mistake;
• There is no suggestion on the papers of fraud that would entitle the RAF to revisit the settlement agreement; and
• The prospects of success with the contemplated Mudawo appeal are not addressed in the RAF’s application despite the application being premised on such an appeal.

Acting Judge Andrews said the question that requires to be answered is whether the pending SCA decision precludes Chitandara from executing on a valid judgment.

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She said the RAF made an offer of compromise to which no conditions were attached and Chitandara accepted it on behalf of the minor child.

Acting Judge Andrews said the court was alive to the fact the RAF relies entirely on the fiscus for its funding and it should be astute to protect itself against illegitimate or fraudulent claims.

However, she said this does not mean that the RAF may ignore basic procedural requirements and its application is silent on whether the compromise was fraudulently obtained.

Andrews said that even if the outcome of Mudawo SCA appeal favours the fund, the RAF cannot wish away the existence of the current court order.

She referred to a previous high court judgment that held that “an order of court stands until it is set aside by a court of competent jurisdiction, and until then, it must be obeyed even if it may be wrong”.

“This principle emphasises the importance of respecting and complying with court orders, even if they may be perceived as incorrect or unjust,” she said.

Andrews said the court can only protect the fund against illegitimate or fraudulent claims if the RAF makes out its case for the relief it seeks in the papers.

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She said the RAF’s founding affidavit only suggests that once the legal position in the Mudawo matter is pronounced will the RAF be vindicated in the stances it has taken on the “foreigner issue”.

She said the RAF further proposes that once the legal position is pronounced, it will result in the fund having to attempt to undo the current court order by way of rescission or appeal.

“In its own argument it uses the word ‘attempt’ meaning that the applicant [RAF] does not have confidence in the prospects of success,” she said.

“The applicant [RAF] has failed to set out the basis to attack the compromise in its founding affidavit.

“I agree that the applicant [RAF] has failed to make out its case for the relief sought. The application is anorexic on the aspect of prospects of success in both the pending Mudawo appeal matter and the intended application for rescission.

“While the outcome of the SCA decision in Mudawo is crucial, as it will determine the rights of foreign nationals in accessing compensation for road accidents, the pending outcome cannot in my view, be authority to stay the warrant of execution in this matter.”

This article was republished from Moneyweb. Read the original here.