The legal problems confronting the Road Accident Fund (RAF) are intensifying, with the Gauteng High Court (Pretoria) this week dismissing with costs an urgent application by the fund to prevent its moveable assets from being removed and auctioned to settle another unpaid claim.

RAF CEO Collins Letsoalo said the fund had studied this new judgment and, after consultation with its attorneys, the decision of Judge Mpostoli Twala is to be appealed, notes a Moneyweb report.

Letsoalo also confirmed that the RAF is applying for the rescission of the judgment handed down by Judge Elizabeth Kubushi in the same court on 12 October that found him to be in contempt of court in terms of a court order issued on 29 January 2018 related to a claim submitted to the RAF by another accident victim.

That judgment placed Letsoalo at risk of being jailed for three months for contempt of court.

This week’s judgment related to an application by the RAF for interim relief pending the confirmation and verification of claimant and foreign national Danubio Macamo’s legal entry into and continued presence in SA.

The RAF claimed the sale in execution should be stayed to enable it to bring an application to rescind the order of 18 April in favour of Macamo because a RAF employee, Ms Mathebula, had no authority to settle the claim without complying with the requirements of a management directive.

In terms of the directive issued by the RAF on 21 June 2022, all foreign nationals who lodge claims against the RAF are required to submit proof of their lawful entry and presence in SA.

The Minister of Transport promulgated the RAF 1 Claim Form incorporating the requirements in terms of the directive issued on 21 June 2022 through a notice published in the Government Gazette on 4 July 2022, notes Moneyweb.

Counsel for Macamo submitted that there was an offer and acceptance between the parties, as a result of which a joint minute was concluded and presented in court, with the consent of the RAF, that the settlement be made an order of court.

Macamo’s counsel further said the RAF has since 18 April 2023 not raised any issue nor was the offer dependent on any condition precedent. It is only now, in this application, that the issue of compliance with the management directive has been raised by the RAF.

Macamo was involved in a motor vehicle accident on 6 December 2015, lodged a claim with the RAF in 2017 and then instituted legal proceedings against the RAF in 2019. Twala said the RAF defended the action, but its defence was struck out on 4 October 2021 because it failed to meet certain procedural aspects in the case.

Following the striking out of the RAF’s defence, the fund made an offer on 21 July 2022 to settle the matter in its entirety through the payment of R1.65m, which was accepted by Macamo on the same day.

On 26 August 2022, the parties made joint submissions on the settlement offer and its acceptance, which was confirmed by a memorandum from the RAF.

However, the RAF failed to make payment when it was due, resulting in Macamo issuing a writ of execution that was served on the RAF on 12 June. 

Twala said there are two central issues to be determined in this case: Whether Macamo is obliged to furnish the RAF with the information it requires in terms of the management directive it issued on 21 June 2022 (in other words, whether the management directive issued on 21 June 2022 has retrospective effect); and whether the RAF employee who settled Macamo’s matter had the necessary authority to settle and/or was obliged to comply with the RAF’s management directive when she settled the matter.

According to Moneyweb, Twala said he did not understand the RAF to be denying that it concluded the settlement and consented to it being made an order of court, and the issue is the authority of its employee in concluding and consenting to the settlement being made an order of court without Macamo’s compliance with the management directive.

‘I am unable to disagree with the second respondent (Macamo) that the management directive provides that it applies to all lodgements received or pre‑assessed from the date of the directive. The management directive therefore has no retrospective application.'

Twala added that the management directive is not an Act of Parliament and, therefore, it is not the law and cannot trump or be contrary to the Act that created it.

He said: ‘It is my respectful view therefore that there is no merit in the application to stay the operation of the order of 18 April 2023 and to interdict the sheriff from executing that order. The applicant has failed to demonstrate that the order was erroneously granted. The only purpose to be served by this application is to delay the respondent from receiving his compensation for the loss and or damages he suffered as a result of the driving of a motor vehicle as provided by the Act. The applicant has failed to demonstrate that it has any prospect of success in its application for rescission of the order and therefore the application falls to be dismissed.’

Full Moneyweb report