Spartan Caselaw

Mafisa v Road Accident Fund [2024] ZACC 4

CIVIL PROCEDURE – Settlement agreement – Order of court – Parties in RAF claim concluding settlement agreement

Judge unilaterally amending settlement agreement and striking out amount for loss of earnings – Audi alteram partem not adhered to – High Court exceeded its jurisdiction and its unilateral alterations to agreement were improper – Irregular for court to have considered the actuarial and industrial psychologist’s reports to reject agreed settlement for loss of earnings, as those reports were not properly before the court – Failed to raise its concerns with applicant and RAF to enable them to decide whether to provide additional material – Order replaced with one making draft order an order of court.

Facts: Mr Mafisa (applicant) was 29 years old at the time when he was injured as a passenger in a motor vehicle when the driver of the vehicle collided with a tree in 2016. Summons was issued in the High Court against the RAF with a claim for R2,387,568 for past and future medical expenses, past and future loss of earnings and general damages. His pleaded claim in respect of past and future loss of earnings was R1,537,568. On the first day of the hearing, the parties requested that the matter stand down for settlement negotiations. The next day, the judge was advised that the parties had concluded a settlement agreement. There was no hearing and no evidence was adduced. The parties then approached the judge and requested her to make the settlement agreement an order of court. The judge indicated that she was not entirely satisfied with the terms of the draft order. The High Court later handed down a written judgment in which the court unilaterally amended the settlement agreement. The court amended the draft order by striking out the amount in respect of loss of earnings and awarding the applicant R350,000 in respect of general damages only. The High Court found the industrial psychologist’s report unpersuasive and held that it failed to prove that the applicant sustained damages with respect to past and future loss of earnings.

Appeal: The High Court dismissed the application for leave to appeal and the applicant petitioned the Supreme Court of Appeal, but without success. An application to the President of the SCA for reconsideration suffered a similar fate. At the Constitutional Court the applicant submits that the matter raises two constitutional issues. First, the unilateral alteration of a settlement agreement without affording parties an opportunity to be heard amounts to a procedural and substantive irregularity. The second is that the High Court discarded its role as impartial arbiter when it stepped into the role of the Executive as the guardian of public funds, thereby infringing the separation of powers doctrine.

Discussion: Lawfully struck compromises find support in our law as they not only serve the interests of the litigants but may also serve the interests of the administration of justice. Courts should not readily second-guess parties’ decision to settle the issues as they defined them in their pleadings. A compromise generally brings an end to the dispute between the parties. Once there is a compromise, there is no longer a lis between the parties. In this case the parties were not afforded an opportunity to address the court’s concerns if they so wished. This is despite the obligation on courts to hear the parties before making an order that is adverse to them. The audi alteram partem principle was not adhered to. The court was presented with a settlement to be made an order of court. If the court were disinclined to do so, the parties should have been informed of its concerns and given the opportunity to consider their position, whether they wished to address the issues raised or not. However, the caveat here is that there would have had to be admissible evidence before the court, which was not the case here.

Findings: Courts have a discretion to make a settlement agreement an order of court and in exercising this discretion must consider all relevant factors set out by this court in Eke v Parsons [2015] ZACC 30. The High Court exceeded its jurisdiction when it unilaterally amended the settlement agreement. Its unilateral alterations to the agreement were improper. As there was no hearing since the parties had settled the dispute between them, it was improper and irregular for the High Court to have considered the actuarial and industrial psychologist’s reports to reject the agreed settlement for loss of earnings, as those reports were not properly before the court. It also failed to raise its concerns with the applicant and the RAF to enable them to decide whether to provide additional material in an effort to persuade the judge or elect not to do so. Had it done so, the parties could have elected to address the court’s concerns or declined to do so. In the latter case, the court would have been entitled to refuse to make the settlement an order of court on any of the grounds provided for in Eke if this were justified.

Order: The appeal is upheld. The order of the High Court is set aside and is replaced with the following: “The draft order marked ‘X’ is made an order of court.” There is no order as to costs.

MHLANTLA J (unanimous)

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Enever v Barloworld Equipment [2024] JA86-22 (LAC)

LABOUR – Dismissal – Cannabis positive test – Cannabis used for medicinal purposes – Zero tolerance workplace policy

Use of blood test alone without proof of impairment on work premises is violation of appellant’s dignity and privacy – Policy prevents appellant from engaging in conduct that is of no effect to employer – No proof of intoxication or increased risk of occupational health and safety – Unfair discrimination – Respondent’s policy declared irrational and violates right to privacy.

Facts: The appellant’s general practitioner prescribed her medication for pain and sleep due to her severe anxiety. However, she suffered from side-effects from the prescribed medication. After the decriminalisation judgment, she began using cannabis which she says eventually helped reduce her reliance on the prescription medication. She says she saw improved relief from cannabis-based products, without any of the side effects. She says that she smokes a rolled-up cannabis cigarette every night and on weekends, along with daily use of cannabis-based products like cannabis oil. The respondent employer has a zero-tolerance policy regarding drug and alcohol consumption at the workplace. The appellant was dismissed for testing positive for cannabis while on duty during a routine medical check.

Appeal: The Labour Court concluded that the fact that the appellant felt her cannabis use was medicinal does not mean the policy should not apply to her because she did not provide medical evidence. Thus, the policy had to be applied consistently, regardless of the rationale behind the positive test. This is an appeal from the Labour Court which confirmed the fairness of the appellant’s dismissal after she tested positive for cannabis.

Discussion: The respondent was well aware that the decision in Minister of Justice v Prince [2018] ZACC 30 meant that adults could consume cannabis in the privacy of their homes, so it sent a note alerting its employees that if they tested positive for cannabis, they would be dealt with in terms of its zero-tolerance policy against alcohol and substance abuse. The appellant submits that the discrimination she faced as a cannabis user seriously infringed her dignity by violating her right to privacy and subjecting her to a humiliating process that portrayed her as a “junkie”. When testing positive, the appellant was not impaired in the performance of any of her duties. It is common cause that the appellant worked in an office and her job did not entail operating dangerous machinery. She was also not required to drive for the respondent or perform any duty where impairment from cannabis would present a risk to her or others in the workplace. The appellant says her use of cannabis in the evenings and on weekends in the privacy of her home is her right and that the policy violates it. The significance of the decision in Prince implicates the nature of the right to privacy, which all employees have. An employer cannot disregard an employee’s privacy when implementing or acting in terms of its policies.

Findings: An objective consideration of the respondent’s policy is that any employee who works for it cannot smoke cannabis at all. There is no justifiable reason for the infringement of the appellant’s right to privacy. The principle that overbroad, unwarranted and unjustifiable invasions of the right to privacy being unconstitutional is applicable. The use of a blood test alone without proof of impairment on the work premises is a violation of the appellant’s dignity and privacy. This as the policy prevents her from engaging in conduct that is of no effect to her employer, yet her employer can force her to choose between her job and the exercise of her right to consume cannabis. The respondent has not shown that she was “stoned” or intoxicated at work as a result, that her work was adversely affected or that she created an unsafe working environment for herself or her fellow employees. The respondent would not have known, apart from the appellant volunteering the information that she smoked cannabis and the reason therefor. The respondent’s policy is overbroad and infringes the appellant’s right to privacy. Her treatment as someone who was intoxicated when in fact she was not, is unfair discrimination because it singles out cannabis users compared to alcohol users, for what they do at home, even in situations where their conduct carries no risk for the employer.

Order: The appeal is upheld. It is declared that the respondent’s Alcohol and Substance Abuse Policy is irrational and violates the right to privacy. It is declared that the respondent subjected the applicant to unfair discrimination. The applicant’s dismissal was automatically unfair. The respondent is ordered to compensate the applicant by paying her 24 months compensation.

MLAMBO JA (WAGLAY JP and DAVIS JA concurring)

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Mashavha v Enaex Africa (Pty) Ltd [2024] ZAGPJHC 387

COSTS – Party and party – Uniform Rule 67A – Purpose and application of rule discussed

Scales A, B and C set out – In this case the issues were uncomplicated – Entire case determined on bases of jurisdiction and standing and merits never became relevant – Hearing lasted under an hour – A scale applicable – Misconduct of unsuccessful party irrelevant once court has declined to award punitive costs order – What counts under Rule 67A is complexity of argument that actually had to be advanced by counsel, rather than the potential complexity of the case in all its facets.

The judgment: The judge gave judgment ex tempore in opposed motion court, dismissing the application, in part because the court lacked jurisdiction to decide the application, and in part because the applicant lacked standing to bring it. Most of the applicant’s claim fell within the exclusive jurisdiction of the Labour Court. The rest of the claim was an attack on ENAEX Africa’s award of a contract to Enterprise Outsourcing, which was a decision in which the applicant, Mr Mashavha, could show no legal interest. Mr Mashavha was ordered to pay the costs of the application, on the party-and-party scale.

Rule 67A: Mr Coertze, who appeared for Enterprise, pointed out that, on 12 April 2024, Rule 67A of the Uniform Rules of Court had come into effect. Rule 67A(3)(a) now requires that party-and-party costs in the High Court be awarded on one of three scales: “A”, “B”, or “C”. In light of the fact that none of the parties had made out a case under the new rule, they were given an opportunity to make written submissions on whether Rule 67A applies to this case, and, if it does, the scale on which costs should be awarded.

Discussion: Rule 67A addresses itself only to awards of costs as between party and party. Its purpose is to permit a court to exercise control over the maximum rate at which counsel’s fees can be recovered under such an award. The court sets a maximum recoverable rate for that work having regard to the importance, value and complexity of the matter – Rule 67A(3)(b). Rule 67A(3) provides that a court “shall”, when making a party-and party-costs order, “indicate the scale in terms of Rule 69, under which costs have been granted”. Those scales have been inserted into Rule 69(7) under the amendment that created Rule 67A. They are scales “A”, “B”, and “C”. They set the maximum rate at which counsel’s fees may be recovered on a party and party bill. Scale “A” provides a maximum tariff of R375 per quarter hour; scale “B” sets a maximum tariff of R750 per quarter hour; and scale “C” sets a maximum tariff of R1,125 per quarter hour. It seems that the approach to setting a scale of costs under Rule 67A(3) should be, first, to identify the appropriate scale (“A”, “B” or “C”) in light of the importance, value and complexity of the case, and then consider whether, because of inartful or unethical conduct of the nature identified in Rule 67A(2), that scale should be reduced, such that the successful party should not be able to recover counsel’s costs to the extent that they would otherwise have been entitled.

Application to this case: In the case, the issues were uncomplicated. The entire case was determined on the bases of jurisdiction and standing. The merits never became relevant. The hearing lasted well under an hour. The case was competently and ethically pursued by all concerned. The “A” scale is plainly applicable. The mere fact that punitive costs were sought by the successful party does not mean that a higher scale of counsel’s costs ought to be awarded on the party-and-party scale. The focus of Rule 67A is not on the conduct of the losing party. It is primarily on the nature of the case, and, secondarily, on the way that the successful party presented it. The misconduct of the unsuccessful party, if any, is irrelevant once a court has declined to award a punitive costs order against them. What counts under Rule 67A is the complexity of the argument that actually had to be advanced by counsel, rather than the potential complexity of the case in all its facets. In this case, the argument that had to be advanced was short and straightforward. The recovery of counsel’s fees on scale “A” is more than sufficient. Rule 67A(3)(c) states that if a court declines to indicate a scale in its order, the lowest scale – scale “A” – applies. Given that, under Rule 67A(3)(c), the application of the “A” scale is the effect of the judgment as it currently stands, the court declines to make any further order.

WILSON J

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