By Mzukisi Ndabeni

In Mbatha v Road Accident Fund 2017 (1) SA 442 (GJ), the court disallowed costs at the preliminary stage of the proceedings. The court refused to award costs at that stage and ordered that the costs be ‘costs in the cause’. The court, per Satchwell J, gave four reasons for such a refusal:

‘(1) No examination, reports or opinions of any identified or unidentified “experts” are before court and have not been utilised to reach this preliminary agreement on merits. The legal representatives themselves have not utilised nor agreed on these reports and the experts. The court has no idea who may, or may not, ever be utilised as an “expert”. Such “expert” has not yet contributed to any result – which result is currently only the issue of fault as to the accident.

(2) The judge presented with an agreement only on the merits has no idea … of the injuries sustained or their sequelae or the financial consequences thereof and the likely quantum of damages. The focus has been on merits only. Perusal of pleadings is of no assistance. … Absent any idea as to the quantum of damages which may be awarded (if any), a court is placed in a very difficult position as to the scale of costs which should be incorporated in such an order made by the court. I decline so to do where I have no idea at all as to the possibility of any quantum ever being determined.

(3) The section 17(4)(a) [of the Road Accident Fund Act 56 of 1996] undertaking only has financial value if and when healthcare treatment is required, the patient himself or herself pays for such treatment and thereafter claims a refund from the [Road Accident Fund] RAF. …

(4) What is casually called a “road accident claim” or a “RAF claim” is a claim for damages. A decision as to the merits is merely a preliminary stage on the way to achieving the intended outcome – monies paid over as damages. When presented with an agreement that merits have been settled but nothing else, I would expect a court to have some concern why it is expected that fees and disbursements should be paid when there is no actual outcome, no identifiable result, and no money in the pocket of the road accident victim.’

The contents of the judgment

Firstly, I wish to deal with the paragraphs in which the four reasons stated above were based.

As Satchwell J began her judgment, she, in a way, cautioned other judges at para 3 and stated that: ‘This is an important issue and certainly operates to the great disadvantage of the legal representatives of the plaintiff road-accident victims whilst the defendant RAF legal representatives continue to be paid for all their services irrespective of their success or failure and whether or not only a preliminary stage of the litigation is reached. It may well be that other judges, thinking slowly and carefully and without the pressure of managing some 350 matters set down for the trial roll in one week, may come to a different opinion’.

At para 6 the court held: ‘What I have found striking is the absence of any result of any significance whatsoever for the plaintiff road-accident victim. It is of no assistance to them that they have succeeded on the merits’. This cannot be, because, a RAF claim is a delictual claim and, as such it has to comply and be based on the law of delict. It is trite that the law of delict has five elements –

• the commission or omission of an act;
• which is unlawful or wrongful;
• committed negligently or intentionally;
• which results in or causes harm (causation); and
• the suffering of an injury, loss or damage.

In a RAF claim the legal practitioner has to allege and prove these elements. The first three elements relate to the merits of the case. Without alleging and proving these three elements there can never be a claim for damages, which means that there can never be a RAF claim. It was, therefore, incorrect for the court in the Mbatha matter to simply dismiss merits as an insignificant result and of no assistance to the plaintiff who is a road accident victim. The merits are infact as important as the quantum. One must prove the three elements, for there to be damages payable. In Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A), dealing with a loss of support matter, Corbett JA, as he then was, stated that ‘the basic ingredients of the plaintiff’s cause of action would be (a) a wrongful act by the defendant causing the death of the deceased, (b) the concomitant culpa (or dolus) on the part of the defendant, (c) a legal right to be supported by the deceased, vested in the plaintiff prior to the death of the deceased, and (d) … real deprivation of anticipated support.’ The court went further and stated that the first three elements of the plaintiff’s action fell to be determined as part of the merits, and the fourth element was an issue properly to be dealt with when quantum of plaintiff’s damages was to be determined. Without the plaintiff having proved that there is fault or wrongfulness on the part of the defendant then there would be no claim and/or delict.

At para 10 of the Mbatha matter, Satchwell J stated that: ‘I am being asked to make an order that the merits of the road accident are settled and the issue of quantum (if any) is postponed to another day. I am asked to award costs on the High Court scale to advocates and attorneys and the healthcare practitioners or actuaries who may perhaps be used as expert witnesses when it comes to the issue of quantum.’ This is incorrect on the following basis:

• The plaintiff and not his or her legal representative, is entitled to costs. The legal representatives can only recover the disbursements.
• The relationship between client and his or her attorney(s) is regulated by the Contingency Fees Act 66 of 1997 (the Act). Section 2(2) and s 3(b)(ii) of the Act deals with the issue of costs. If the client, and not the attorney, paid the costs to the opponent, in the event of unsuccessful litigation, then concomitantly, should the client be successful, he or she is entitled to costs and not the attorney. Graham and Another v Ronald Bobroff & Partners and Another (GP) (unreported case no 5203/2015, 17-3-2015) (Matojane J), involved overreaching, where the respondent charged the 25% as per the contingency fee agreement and thereafter took the costs as well. This was held to be improper conduct on the part of the respondent and he was found to have overcharged the client.

At para 24 of the Mbatha judgment Satchwell J stated: ‘In numerous matters I was asked to have regard to the so called “medico-legal” reports so that I could extract therefrom the opinions of potential but unheard witnesses as to what might be the cost of treatment in the future. The problems are obvious – I have not heard from such witnesses, I do not know whether their opinions should be accepted, …’. In a typical RAF matter and during merits, in most instances the plaintiff will furnish the defendant with an accident report, hospital records and s 19(f) affidavit and on those documents alone, the parties are able to reach an agreement on whether there should be apportionment or not, and if so, how much? A draft order is made. Now the court has no evidence in this regard, neither from the plaintiff, police officer, the paramedics, a mechanic, an accident reconstruction expert, an engineer nor the doctor who examined the plaintiff after the collision. The court does not know whether their evidence should be accepted or not. In this instance, the court is willing to make the draft order an order of the court without having regard to how much the quantum will be.

The court at para 25 of the Mbatha judgment stated that ‘both parties did not simultaneously find the opinions compelling since they could not agree on quantum based on those reports’. Here the court is drawing inferences – Satchwell J does not know why the parties decided to separate issues. It might be that one of the parties did not file all the reports, it might be because there are no joint minutes, or it might be because no offer was forthcoming from a claims handler to proceed with quantum. Strangley in the Supreme Court of Appeal (SCA) in Motswai v Road Accident Fund 2013 (3) SA 8 (GSJ), the same judge (Satchwell J) blasted the legal representatives for ‘fabrications of a claim for “enrichment’”. Satchwell J went further and stated that the legal representatives should not recover any costs for reaching a settlement, when the claim had no legal or factual basis. The SCA overturned the judgment and found that her decision had been prepared on the basis of inferences drawn from the documents in the court file and from informal discussions with the parties’ legal representatives. In the Mbatha matter, the judge committed the same error.

At para 28 of Mbatha, Satchwell J, stated: ‘When presented with an agreement that merits have been settled but nothing else, I would expect a court to have some concern why it is expected that fees and disbursements should be paid when there is not actual outcome, no identifiable result, and no money in the pocket of the road-accident victim’. This finding is unfounded because, there is an outcome and there is an identifiable result. It has been determined who was at fault, alternatively, the element of wrongfulness and/or fault has been established. The costs to be awarded do not belong to the legal representatives, in that, in terms of the Act the client is entitled to the fees (Bobroff (op cit)). The disbursements are due to the attorney.

At para 31, the court held: ‘After all, they have claimed to be and have been judicially certified as “trial ready” in accordance with the new judicial case-management/certification procedure’. It cannot be that when the matter is certified trial ready it means ready to proceed on both issues, hence r 33(4). The matter can be trial ready on merits, the matter can be trial ready on quantum or the matter can be trial ready on both issues of quantum and merits. That is when the agreement between the parties becomes crucial. If the parties decide to proceed on merits only, it is not for the court to seek reasons for separation, the same way it is not for the court to decide on apportionment when the parties have agreed on apportionment. Surely it was not the intention of the Judge President, and the people who assisted him in drafting the practice manual, to interfere in the manner in which parties decide to litigate. By dictating whether a party is entitled to costs or not during the merits part, Satchwell J entered into the arena and dictated how parties should litigate and settle matters. She ought to have decided the matter as it was presented to her and not overreached and made unfounded inferences. On the evidence above, I submit that the decision in the Mbatha matter was incorrect.

Mzukisi Ndabeni LLB (University of Fort Hare) is an attorney at MA Selota Attorneys in Johannesburg.

This article was first published in De Rebus in 2017 (July) DR 54.