Ubisi and Another v Road Accident Fund (711/2023) [2024] ZASCA 93 (11 June 2024)

The case involves a dispute between Mr. Matedewuja Kenneth Ubisi (the first appellant) and the Road Accident Fund (the respondent) in South Africa. Mr. Ubisi filed a claim against the Road Accident Fund for R9,500,000 in damages resulting from injuries sustained in a motor vehicle accident. The Road Accident Fund initially disputed liability and the quantum of the claim. However, on 5 June 2019, the parties reached a settlement agreement where the Road Accident Fund agreed to compensate Mr. Ubisi for 100% of his proven or agreed damages.

The matter proceeded to the High Court in Gauteng for a hearing on the quantum of damages on 25 November 2021. On the day of the hearing, the Road Accident Fund made an offer of settlement to Mr. Ubisi's attorneys, Nel, van der Merwe & Smalman Incorporated (the second appellant). The offer included compensation for general damages, loss of earnings, and an undertaking for future medical expenses and costs. Mr. Ubisi's attorneys accepted the offer on his behalf and prepared a draft order on 6 May 2022, which the Road Accident Fund consented to on the same day.

However, during the hearing on 5 June 2022, the High Court expressed dissatisfaction with the settlement terms, indicating that it was not a mere rubber stamp and needed to scrutinize such agreements. The court reserved judgment to consider the proposed settlement, citing discrepancies with Mr. Ubisi's industrial psychologist's report regarding his work status post-accident and the quantum of damages agreed upon.

Subsequently, on 1 August 2022, the High Court set aside the settlement agreement, ordered the Road Accident Fund to issue an undertaking, and directed Mr. Ubisi's attorneys to pay costs de bonis propriis. The court also made adverse findings against Mr. Ubisi's legal representatives, alleging impropriety and fraud without affording them a fair hearing.

The appellants appealed the High Court's decision, arguing that the settlement agreement should have been respected and enforced, as it met all legal requirements. The appeal was upheld by the Supreme Court of Appeal, which found that the High Court lacked jurisdiction to set aside the settlement agreement and had made unjust findings against the legal representatives. The Supreme Court of Appeal replaced the High Court's order with one making the settlement agreement an order of court and made no order as to costs for the appeal.

The core legal principle underlying the decision is that once parties have freely and voluntarily settled their dispute and presented a settlement agreement to the court to be made an order of court, the court should generally respect and enforce such agreements. The court should not interfere with the terms of the settlement agreement unless there are exceptional circumstances, such as terms that are unconscionable, illegal, or offensive to public policy. Additionally, the court should not make findings of fraud or dishonesty against legal representatives without clear evidence and affording them a fair hearing. The court's role is to raise concerns, allow parties to address them if they choose to, and only refuse to make the settlement agreement an order of court if the concerns are not satisfactorily addressed.

The court relied on the case of Mafisa v Road Accident Fund [2024] ZACC 4.