Function of the court on settlements

March 1st, 2021
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Many years ago, a client consulted me and instructed me to institute an action in the High Court (then known as the Supreme Court) claiming payment of a debt owed by a recalcitrant debtor. After taking instructions, I cautioned the client about the wisdom of proceeding as the costs incurred could well outweigh the financial viability of proceeding. The client appreciated my word of caution. However, in no uncertain terms I was assured that the financial viability was of no consequence as this was a ‘matter of principle’. As the merits of the claim itself exhibited a strong possibility of a successful outcome, I proceeded in terms of the instructions I was given.

Some two years later the matter – which turned out to be defended – came to trial and after many hours spent in preparation for the trial, the day of the hearing arrived. Just after roll call and while walking from the roll call court to the court where the hearing was to take place, my opponent made a settlement proposal. As the proposal was, in my view, one which I could not advise my client to accept, I indicated to my opponent that I would put the proposal to my client, but expressed my doubt that it would be accepted. My client saw me speaking to my opponent and questioned me about what was discussed. I relayed the proposal to my client and before I could proffer my advice, the client immediately and without any hesitation and in clear and unequivocal terms, instructed me to accept the offer. I was informed that the client no longer wished to proceed with the matter as what was a ‘matter of principle’ two years earlier was no longer such a matter and insisted that the matter be settled on the terms proposed.

My counsel shared my view that we became obliged to act in terms of the unequivocal instructions we received, and the matter was so settled.

I recalled this matter when reading and considering some recent judgments concerning the function of the court on being advised of a settlement achieved by the parties.

The first judgment to which I wish to refer is in the case of Mzwakhe v Road Accident Fund (GJ) (unreported case no 24460/2015, 26-10-2017) (Weiner J), where Weiner J at para 6 of the judgment held:

‘In being requested to make this an order of court the court is not merely a rubberstamp. The court has a duty to investigate the matter and ascertain whether or not the agreement is one which should be made an order of court. This is even more essential when the respondent is a public institution whose finances and the administration thereof are in the public interest.’

The judge was handed a draft order by the parties who were present and represented and after perusing the draft was dissatisfied with it. The judge then proceeded to indicate her refusal to make it an order of court and instead handed down an order in which, inter alia, the defendant was interdicted from paying to the plaintiff any amount in settlement of the entire claim without being presented with a stamped and signed order of court.

I refer now to the case of Maswanganyi v Road Accident Fund 2019 (5) SA 407 (SCA). In the minority judgment, the court at paras 57 and 58, in which Zondi JA and Mocumie JA concurred held:

‘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.

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.’

The most recent judgment was in the matter of MT v Road Accident Fund; HM v Road Accident Fund (GJ) (unreported case no 37986/2018, 16-11-2020) (Fisher J). In this judgment, Fisher J dealt with two matters involving the same defendant. In respect of the first matter before her, after engaging with plaintiff’s counsel she was informed that a settlement had been achieved, which the parties did not wish to have made an order of court and she was requested to remove the matter from the roll. Because the judge was dissatisfied that a settlement in an amount far lower than what was indicated to her was on the table, she postponed the matter sine die and referred the conduct of the plaintiff’s attorneys and counsel and an expert witness to their professional bodies to investigate their conduct in the matter with a view that they be subjected to disciplinary action.

In the judgment of MT there was an application for leave to appeal the judgment, which had been lodged by the parties. The application has yet to be decided. It is, therefore, inappropriate for me to comment on the text of the judgment itself.

To my mind, whenever a court is advised that the parties have achieved a settlement the inquiry is what the function of the court should be and how should that function be exercised.

I submit that if the court is informed that the matter has been settled and the parties do not wish that its terms be made an order of court, that is the end of the matter and the function of the court is to note that the matter has been settled and for it to be removed from the roll. If the parties wish that a settlement be made an order of court, the Presiding Judge must exercise judicial oversight and if they are dissatisfied, they may refuse to make it an order of court but must then remove the matter from the roll.

In the judgments referred to above, mention was made of the fact that the Road Accident Fund (RAF) faces many challenges and that it must be protected by the courts.

I respectfully submit that the strategy adopted by the RAF in terminating the mandate of its panel attorneys because it wishes to save costs and would rather enter into settlements, is a strategy adopted by the RAF Board and as such, the RAF must live with the consequences of such decisions irrespective of whether such consequences are positive or negative. Members of the judiciary must resist the seemingly overwhelming temptation to overreach their duties and responsibilities. Just as a legal practitioner cannot insist on representing a client when the client does not wish to be represented irrespective of the client’s reason, so members of the judiciary must appreciate that the client’s wish at the end of the day is what must be met.

Because of the above, legal practitioners are ethically, morally and legally bound to accept the instructions of the client so long as the decision of the client is not one which can be said to be against the law.

Leslie Kobrin Dip Iur (Wits) Dip Bus Man (Damelin) is a legal practitioner at Bove Attorneys Inc in Johannesburg.

This article was first published in De Rebus in 2021 (March) DR 6.

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