Road Accident Fund v Absa Bank Limited and Another (52865/2020) [2020] ZAGPPHC 671 (22 October 2020)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

(1) REPORTABLE: YES/NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3) REVISED.

22/10/20

CASE NO: 52865/2020

In the matter between:

ROAD

ACCIDENT

FUND

Applicant

and

ABSA

BANK LIMITED

First Respondent

SHOKENG E. DLAMINI N.O. Second Respondent

JUDGMENT

D S FOURIE, J:

[1] The Road Accident Fund applies for the following relief in the urgent Court:

“1. Dispensing with the forms, service and time periods prescribed in terms of the Uniform Rules of Court and directing that the matter be heard as one of urgency in terms of Rule 6(12) of the Uniform Rules of Court.

2. Suspending the execution of the warrants of execution against the applicant’s bank accounts held with the first respondent pending the finalisation of the Rule 45A application of the Uniform Rules of Court under case number 43873/20 in this honourable Court, which was instituted by the RAF on 9 October 2020.

3. Directing the first respondent to preserve the applicant’s bank accounts and to allow the applicant to transact on its bank accounts held with the first respondent, immediately upon the granting of this order, pending finalisation of the proceedings referred to in prayer 2 above.

4. Interdicting the second respondent from proceeding with execution of warrants of execution against the RAF’s moveable assets including its bank accounts held with the first respondent.

5. Directing any respondent who opposes this application to pay the costs of this application, including the costs of counsel.”

[2] The first respondent was represented during argument, but does not oppose the application as the applicant has abandoned the relief sought against the first respondent in paragraph 3 of the notice of motion. The second respondent, who is the Sheriff for the area of Centurion East, has filed an answering affidavit stating that “this affidavit is filed in order to give a synopsis of the second respondent’s case before Court, in order to assist this Court to adjudicate the urgent relief sought by the Road Accident Fund”.

CASE FOR THE APPLICANT

[3] It is common cause that the object of the applicant is the payment of compensation in accordance with the Road Accident Fund Act, No. 56 of 1996 for loss or damage wrongfully caused by the driving of motor vehicles. It is alleged that the applicant’s income has declined drastically due to the poor economic climate in South Africa as a result of the COVID-19 pandemic. The applicant has therefore implemented an equitable system of paying claims on the basis that claims as requested but not yet paid “will be paid from the oldest to the newest”.

[4] The claims settled are expected to average R4,3 billion a month, whereas the fuel levy income is expected to average about R3 billion a month. The payment delay from settlement to payment is expected to increase gradually from 187 days to 331 days, with an average payment delay of 261 days. If these “projections do not improve”, the applicant may be forced to request “an extension of the 180 days current sought”. Whether this will be required, will be reported to the Court on or before 8 October 2021.

[5] Certain attorneys for claimants are not prepared to accept the equitable system referred to above in terms of which claims are paid in accordance with available cash resources. They have resorted to issuing and serving warrants of execution especially against the applicant’s bank account. The effect of these warrants has been to interrupt the proper functioning of the applicant. The applicant is therefore unable to make payments from its bank accounts, unless this Court exercises its discretion and grants an order as contemplated in Rule 45A.

[6] It is pointed out that there is another application pending under case number 43873/20 (the Van der Merwe application) which was instituted by the applicant on 9 October 2020. A copy of that application has been attached to the founding affidavit.

[7] In the Van der Merwe application the applicant applies, inter alia, for the following relief:

“(1) The applicant is afforded a period of 180 days from the date of the grant by this Court of an order in favour of a plaintiff for the payment of damages and legal costs … before enforcement proceedings, including the issuing of writs of execution, attachments and sales in execution are instituted against it;

(2) During the period of 180 days referred to in paragraph (1) above, enforcement proceedings are suspended in terms of the Court’s general powers to stay enforcement proceedings, alternatively in terms of Rule 45A of the Uniform Rules of Court;

(3) Any enforcement proceedings by the respondents in the present matter are, to the extent applicable, stayed pending the expiry of the period of 180 days in paragraph (1) above;

(4) The applicant is directed to file a report confirmed on affidavit on or before 8 October 2021 setting out whether and why the arrangement in terms of paragraph (1) above should be uplifted or continued”.

[8] In the Van der Merwe application (case number 43873/20) it is alleged that the collapse of the applicant’s finances and the consequent inability to fulfil its statutory object will threaten the constitutional rights of persons that suffer injuries and death pursuant to the driving of motor vehicles. It is then stated that the applicant applies “for an interim dispensation in which it will be afforded an opportunity to meet claims within a period of 180 days without the threat of execution proceedings” including the issuing of writs of execution, attachments and sales in execution of its property. It is pending finalisation of this application (case number 43873/20) that the applicant now applies for an order suspending the execution of the warrants of execution against the applicant’s bank accounts held with the first respondent.

[9] In the present application the applicant also refers to other court orders granted in this Division as well as other jurisdictions where the applicant has procured court orders suspending execution proceedings against it pending the outcome of the Van der Merwe application. Copies of these orders have been attached to the founding affidavit. Looking at these orders, it is apparent that not only the Sheriff, but also various firms of attorneys were joined in those proceedings. Even in the Van der Merwe case, the second respondent is a firm of attorneys.

[10] The applicant’s explanation in the present application for not having joined any of the firms of attorneys who issued writs of execution, is the following:

“The applicant is unable to cite all of the potentially affected judgment creditors as well as attorneys acting on their behalf as it only has their names listed in the notice of attachment of the second respondent. Given the urgency of this matter, the applicant has not been able to obtain all of the particulars of the 182 law firms that are listed in the second respondent’s notice of attachment”.

[11] The applicant finally sets out the requirements for an interim interdict. Its explanation for having a prima facie right is that the attachment of the applicant’s bank accounts would have a seriously detrimental effect on the applicant to perform its statutory mandate and without access to its bank account, the applicant will loose access to its most important “tool of trade … which it uses to fulfil its statutory obligations”. This will impede the rights of tens of thousands of other claimants who are presently awaiting the satisfaction of their judgment debts “in that it will wreck havoc on all of the applicant’s offices nationwide”.

SECOND RESPONDENT’S

ANSWER

[12] The second respondent points out that the attachment of the applicant’s accounts has not resulted in it not having access to the accounts. What is attached are the monies held in the accounts, to the equivalent of the total amount owing in respect of the writs. The applicant has always had access to the accounts as well as any monies which remain in the account, after the bank has already paid over the value of the writs, to meet its operational expenses and to pay the claims.

[13] According to the second respondent the judgments which underpin the writs “are older than 180 days”. Despite the applicant’s own version that it gives priority to claims older than 180 days, these judgments remain unpaid. The judgment creditors are therefore left with no option but to invoke the only legal remedy which the law gives them, i.e. execute against the applicant’s banking accounts.

[14] Copies of a few writs of execution are annexed to the answering affidavit. According to these copies it appears that:

(a) in case number 1290/2018 the order was granted on 15 October 2019 and the writ issued on 12 December 2019;

(b) in case number 34288/2015 the order was granted on 28 October 2019 and the writ issued on 13 March 2020;

(c) in case number 1670/2016 the order was granted on 23 October 2019 and the writ issued on 6 December 2019;

(d) in case number 10192/2017 the order was granted on 1 August 2019 and the writ issued on 12 June 2020;

(e) in case number 96469/2016 the order was granted on 22 November 2019 and the writ issued on 21 January 2020;

(f) in case number 82826/2015 the order was granted on 28 November 2019 and the writ issued on 27 January 2020.

[15] According to these examples it appears that the invasion of South Africa by Covid-19 took place after payment of these judgments became due. Furthermore, as a point in limine the second respondent points out that the applicant has failed to join the judgment creditors (or their attorneys) as parties to these proceeding. It is submitted that it was indeed possible for the applicant to obtain the particulars of all these parties. It is pointed out that the writs of execution contain the full details of the judgment creditor as well as the judgment creditor’s

attorney.

[16] It is also denied that the applicant has satisfied the requirements for an interim interdict. More particularly, it is denied that a prima facie right, even open to some doubt, has been demonstrated. In this regard it is pointed out that the applicant still has access to its bank accounts and should therefore be able to meet its obligations.

[17] Finally, the second respondent proposes what she calls “an appropriate remedy”, in the event that the Court is inclined to grant the applicant the relief as claimed. The gist of what has been proposed, can be summarised as follows:

(a) pending the finalisation of the Van der Merwe application, the execution of any writ in respect of which an order or judgment “is less than 180 days”, should be stayed;

(b) the execution of any writ in respect of which a judgment or order is “older than 180 days” should be stayed for a period of 30 days;

(c) the applicant should be ordered to, within 30 days from date of this order, to satisfy all judgments and writs in respect of which judgments or orders “are older than 180 days”.

DISCUSSION

[18] During argument two pertinent issues were debated with the parties. The first relates to non-joinder and the second pertains to the question what would be the consequences if the relief sought, were to be granted? I shall deal with each of these issues separately.

NON-JOINDER

[19] The applicant applies for an order suspending the execution of the warrants of execution against its bank accounts and interdicting the second respondent from proceeding with the execution of these warrants of execution. The warrants of execution were issued subsequent to an order which had been granted in favour of various plaintiffs against the defendant, being

the applicant. The order applied for will not only affect the rights of these third parties, but will result in an order being granted directly against them. No doubt, these third parties have a direct and substantial interest in the order which the applicant seeks to enforce against them. This is a joinder of necessity and the Court will not deal with the issues without a joinder being affected. No question of discretion or convenience arises (Herbstein & Van Winsen, The Civil Practice of the High Courts of South Africa, 5th Edition, Vol 1, p 215 and the authority quoted).

[20] The reason for not having joined these third parties is explained in the founding affidavit as well as in the replying affidavit. In the founding affidavit it is alleged that the applicant was unable to cite all of the potentially

affected judgment creditors (or their attorneys acting on their behalf) as it only had their names listed in the notice of attachment

of the second respondent. Reference is made to 182 law firms that are listed in the notice of attachment. In the replying

affidavit it is further explained that the applicant had to prepare this application under “extreme pressure” over the weekend of 10 and 11 October 2020.

[21] From the explanation given in the founding affidavit it is clear that the applicant was fully aware of the joinder requirement, but has opted not to comply therewith. The explanation given that the applicant was preparing this application

under extreme pressure, bearing in mind there are at least 182 law firms, is also not acceptable. According to its own explanation

the Sheriff was already requested on 21 September 2020 to undertake “not to execute any warrants of execution pending the outcome of the four applications referred to herein”. No doubt, between 21 September 2020 and the weekend of 10 and 11 October 2020 the applicant had sufficient time to obtain all the necessary particulars from the second respondent or by examining the writs of execution.

[22] During argument counsel for the applicant suggested that the problem regarding non-joinder can be cured by the issuing of a rule nisi. As a matter of fact counsel has now prepared a draft order which makes provision for a rule nisi “calling upon the respondents and any interested parties” to show cause on 24 November 2020 why an order should not be granted as applied for in the notice of motion. This draft order specifically provides that the rule nisi operates as an interim interdict with immediate effect and that the order be published in a national newspaper and be posted on the websites of the Pretoria and Johannesburg Attorneys’ Association.

[23] The learned authors of Herbstein & Van Winsen, supra, 216 point out the following in this regard:

“Joinder can be dispensed with only if the interested party has unequivocally waived the right to be joined and undertaken to be bound by any decision that the Court may make. The Court may make use of a rule nisi to give a third party notice of the proceedings. A rule nisi is a judicial invitation to join issue and the failure to appear after proper notice of it is regarded as a waiver of the right to be joined and a submission to the order of the Court. Where the identity of the third party is known the rule nisi should be served upon him. Where the identity of possibly interested persons is not known, or where there are large numbers of such persons, the rule nisi should be published or brought to the attention of such persons by other suitable means” (my underlining).

[24] In this case it appears that the applicant was aware of the identity of the attorneys representing the third parties concerned, as the applicant was not able “to obtain all of the particulars of the 182 law firms that are listed in the second respondent’s notice of attachment” (my underlining). The question is why should this Court, under these circumstances, make use of a rule nisi to give the third parties notice of these proceedings? I take into account the applicant’s precarious financial position and the fact that it has to fulfil a statutory duty in the public interest. However, I should also take into account that the applicant was well aware of the joinder requirement but has decided not to comply therewith. I have already indicated above that the applicant had more than two weeks to obtain the particulars of the attorneys representing the third parties. What then is the real reason for not having joined these parties?

[25] The fact that there is the large amount of about 182 law firms should also not be an excuse. Service by the Sheriff in the urgent Court may be dispensed with. Where so many parties have to be joined service could have been effected by means of electronic means. Therefore, the question still remains, what was the real reason for not having joined these third parties? Was it not perhaps because of a fear that there might be opposition by them and therefore it would be beneficial to obtain an order as soon as possible without giving notice? Taking into account all these considerations, I am reluctant, to say the least, to come to the applicant’s assistance by granting a rule nisi as requested. However, this is not yet the end of this sad story.

CONSEQUENCES OF AN ORDER BEING GRANTED

[26] According to the second respondent the judgments which underpin the writs are older than 180 days and despite the applicant’s own version that it gives priority to claims older than 180 days, these judgments remain unpaid. In the replying affidavit there is only a bald denial regarding these allegations.

[27] This raises the question what will happen in future regarding the payment of claims if there is no system or structure in place to monitor payments and to keep the applicant accountable? There is no definitive answer to this question. According to the applicant’s papers the execution of warrants of execution should be suspended “pending the finalisation of the Rule 45A application”. Nobody knows when that application will be finalised and what will happen between now and then. In the meantime the applicant has a statutory duty to fulfil by compensating claimants for loss or damage suffered.

[28] To address these problems the second respondent suggested “an appropriate remedy” in terms whereof the execution of any writ “less than 180 days” should be stayed. It has also been suggested that in the event the applicant fails to satisfy any judgment or order “older than 180 days” the judgment creditor should be entitled to proceed with execution against the applicant. This structure of payment would, as I understand it, ensure that during the interim period, pending finalisation of the Van der Merwe application, the applicant should perform in terms of its own 180 days payment system as requested by itself in the Van der Merwe application.

[29] However, for some unknown reason, the applicant is not prepared to implement its own 180 day payment system, or even any other system, by incorporating it into an order during this interim period. It is denied in the replying affidavit that the system suggested by the second respondent is just and equitable. According to the applicant the proposed relief, in substance, is very similar to the relief that was sought by the judgment creditor in the other Van der Merwe application, which was brought after the applicant instituted the Rule 45A application. However, in the applicant’s own application issued under case number 43873/2020 it applies, inter alia, for an order affording it “a period of 180 days from the date of the grant by this Court of an order in favour of a plaintiff for the payment of damages … before enforcement proceedings, including the issue of writs of execution, attachments and sales in execution are instituted against it”. Why then is the applicant not prepared to now also accept the same dispensation during the interim period? There is no proper answer to this question. More importantly, it also concerns the requirement of a prima facie right which has not been satisfied in my view. The explanation given by the applicant is almost exclusively directed at the fulfilling of the applicant’s obligations as opposed to the protection of any lawful right.

[30] During argument all counsel were requested to discuss and consider a possible solution to the problem and to agree on a system for payments to be made during the interim period. After a while it was reported that the parties

were unable to come to any solution. Counsel for the applicant also indicated, at a specific question put by the court, that the

applicant “persists with the relief sought in the notice of motion”, subject thereto that a rule nisi be granted. This was a very disappointing result.

[31] The concern is real: there may be a total cessation or suspension of payments during the interim period, or payments may be made only at the discretion of the applicant. As a matter of fact, the applicant appears to be unwilling to give any undertaking which can be incorporated into an order. My impression is the applicant wants to operate freely and without being held accountable as far as payments are concerned during the interim period. This is unacceptable.

[32] The applicant has adopted a relentless attitude. This will not solve the problem. A holistic, objective and reasonable approach should be followed, taking into account not only the interests of the applicant (and its financial position), but also that of judgment creditors and the public in general. Some of these judgment creditors are waiting for almost a year for payment. When will they be paid if there is no structure in place to ensure payment? Furthermore, if the relief as requested were to be granted, the judgment creditors will be left without any remedy for an unknown period of time. They and other claimants will be subject only to the mercy of the applicant who may then on its own decide when, to whom and in what amount payments will

be made. Such a dispensation is not only highly undesirable, but may also have serious consequences. Put differently for those who perhaps don’t understand, this is a recipe for big trouble. For these reasons I am not convinced that the applicant is entitled to an order as prayed for, especially in view of the fact that the relief sought by the applicant is of a very drastic nature without any system regarding payment of outstanding debts being put in place and included in an order. However, in my view the applicant should be given the opportunity to address these concerns in a supplementary affidavit, if it wishes to do so.

[33] For these reasons also, I have decided not to exercise my discretion in favour of the applicant by granting a rule nisi as requested. However, bearing in mind that this is a matter where the public interest is also at stake, I have decided not to close the door for the applicant. The applicant should be given the opportunity to address the issues referred to above by means of a supplementary affidavit, if it wishes to do so, and then to join the interested parties and give notice of the application to all. This purpose can be achieved by not making any order at this stage, save as to costs (cf rule 6(6) of the Uniform Rules).

ORDER

1. No order is made in this application;

2. The applicant is granted leave to renew the application on the same papers, supplemented by a further founding affidavit, and to give notice of the amended application to all parties already joined and also to third parties who should still be joined;

3. Leave for the filing of further affidavits thereafter, is granted;

4. The applicant is ordered to pay the costs of this application.

_____

D S FOURIE

Judge of the High Court

Pretoria

22/20/20