Southern African Legal Information Institute (SAFLII)

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INVALID CONTINGENCY FEE AGREEMENT MR (the minor) was born in 2003 at a state hospital and was later diagnosed with cerebral palsy. The minor’s mother, NR (the guardian), consulted with attorneys. In 2016 a court order confirmed the liability of the MEC and in 2017 a further court order confirmed the quantum of R23,633,780, with more than R18 million allocated for future medical expenses. Rene Fouche Incorporated (RFI) is the firm of attorneys that acted for the guardian. RFI arranged for the guardian to sign a contingency fee agreement (the CFA). Three months after the 2017 order, in December 2017, RFI prepared a document headed “Interim deed of settlement and mandate of instruction (subject to confirmation of costs)”. Of the R25,660,434.18 received by RFI, the amount ultimately paid over by RFI to the trust was R14,763,029.96. The applicants are the trustees of the special trust established for the minor pursuant to the 2017 order. The applicants contend that RFI has withheld far more than it ought to have. A rough calculation indicates that the total amount retained by RFI as legal fees and disbursements exceeds R9,000,000. When the matter was called and the order sought in 2017, no affidavit by the attorneys or the guardian was presented to the court, so neither the terms (nor existence) of the CFA was disclosed. Where the affidavits and CFA were not handed up, RFI failed to comply with the requirements of section 4 of the Contingency Fees Act 66 of 1997. The CFA was concluded far too late in the proceedings and at a time when the risk in the litigation was likely significantly reduced. There particularly was no justification for RFI to conclude an agreement extracting a 100% mark-up from their indigent client at such a late stage where there appears to have been little or no substantive opposition to the merits of the minor’s claim. RFI applied the success fee to all fees charged on the matter from 2011(before their involvement commenced) to the end of their involvement (long after the September 2017 order was granted). The contingency fee agreement of 2017 and the interim settlement agreement and mandate instruction of 2017 are declared invalid and unenforceable. The respondents are ordered to pay to the applicants, for the benefit of the minor, the amount of R3,896,250,43. A copy of this judgment is to be sent to the LPC to investigate and determine whether disciplinary action should be taken against RFI and its directors. Oosthuizen and Another v Rene Fouche Incorporated and Others (022383/2022) [2024] ZAGPJHC 683 (26 July 2024) https://lnkd.in/edF-jRKh

SAFLII Weekly National and Provincial Gazette Update 20 July 2024

SELECTIVE FACTS TAINT MAINTENANCE CLAIM The applicant was 25 years old when the parties got married whilst the respondent was 47 years of age. The applicant at the time was employed as teacher and received a net salary of about R19,000 per month. The respondent was and is employed as an account executive at Dell. The applicant depicts and sketches in her sworn affidavit a marital life of luxury, whilst the respondent to the contrary refers to a comfortable and ordinary standard of living in a three-bedroom home with normal furniture and appliances. The parties’ marriage was short-lived and lasted merely one year and four months. The applicant prays for a contribution towards her spousal maintenance pending finalisation of the divorce action. The applicant as early as at the summons stage clearly and unequivocally revealed her opposition to the mediation process. On Uniform Rule 41A see from para [18]. The applicant claims R25,000 per month in respect of interim maintenance yet she elects not to set out and explain the method of calculating this amount. The vast majority of her sworn affidavit is dedicated to setting the scene and portraying a picture of the respondent being a wealthy man with a lifestyle to suit this. Only in the latter part of her affidavit, the last three pages thereof, does she deal with her maintenance claim and the contribution towards costs. The applicant merely made a single averment that her monthly expenses shall be clear from her Financial Disclosure Form (FDF). The FDF does not clarify how the R25,000 is calculated and there is no correlation. In evaluating the applicant’s FDF it is evident that her monthly expenses total an amount of R55,729.73. These expenses, however, remain unexplained, uncanvassed and their reasonableness not evaluated. The applicant’s maintenance claim of R25,000 is an amount pleaded without any link or reference to her expenses. The amount also remained unexplained and not addressed during argument. The applicant made selective disclosure of the facts needed to establish her need for the relief sought, but not full disclosure. She failed to set out sufficient facts and grounds to sustain her cause of action. All the relevant facts and grounds are not placed before the court in order to properly assess whether a need exists and what the exact extent of this need is. Selective facts were disclosed which lead to a distorted and skewed picture of the reality and this taints the claim. The applicant’s cause of action is incomplete and the facts and grounds pleaded are not sufficient to sustain the applicant’s cause of action and assess the relief sought. M.Y v J.Y (2024/013982) [2024] ZAGPJHC 684 (26 July 2024) https://lnkd.in/eVnDik9y

Economic Freedom Fighters and Others v Chairperson of the Powers and Privileges Committee N.O and Others (23230/2023) [2024] ZAWCHC 192 👉: https://lnkd.in/dXgkcVCx

MAN GETS TO KEEP HIS BMW M5 The applicant missed paying instalments during the Covid-19 lockdown. The respondent caused a section 129 notice in terms of the National Credit Act 34 of 2005 to be sent to the applicant. The applicant contacted the respondent wanting to agree to a restructuring payment plan. The respondent informed the applicant that the file had already been handed over for legal proceedings, which occurred prior to the 20-day cut-off period referred to in the section 129 notice. The respondent and the applicant nevertheless entered into a debt restructuring agreement. Now before court is the rescission application sought because of a judgment obtained by default. A previous judgment was granted dealing with the applicant’s urgent relief to stay the sale in execution of the vehicle. That judge noted that that although the applicant and the respondent’s attorneys had entered into a debt restructuring agreement, which the applicant honoured by paying more than agreed amount, the respondent, only within seven days of the debt restructuring agreement, proceeded with litigation by issuing summons in the High Court. This was not in the spirit of the debt restructuring agreement. The notice of application for default judgment was a cut and paste which failed to set out the procedural position correctly. The founding papers deposed to by the manager and asset and loss recovery at BMW, in support of the application for default judgment, was silent on the fact that the applicant filed a plea under bar, silent about the Uniform Rule 27(3) application, and silent on the debt reconstruction agreement. The deponent merely stated, as advised by the attorneys, that she believed they were entitled to judgment and that the agreement had been cancelled. In consequence, the judge was not appraised of all the facts on affidavit and under oath, and the applicant was precluded from appearing to appraise the judge of material issues. The judgment was erroneously sought by the respondents as envisaged in terms of Rule 42(1)(a). The judgment is rescinded and set aside. The respondent is ordered to return the 2012 BMW M5 to the applicant. The respondent is to reinstate the agreement. Pieterse v BMW Financial Services SA (Pty) Ltd (32048/2020) [2024] ZAGPPHC 599 (7 June 2024) https://lnkd.in/dbxspG8B

Solidarity Trade Union and Others v Minister of Health and Others (61844/2021) [2024] ZAGPPHC 677 Summary: Constitutional law – challenge to constitutionality of the Certificate of Need (CON) scheme set out in sections 36 – 40 of the National Health Act 61 of 2003 – Constitutional Court previously found scheme inchoate without regulations and proclamation of scheme set aside in 2015 ~ regulations still not promulgated and scheme not proclaimed – scheme in its terms violates sections 10 (dignity), 21 (freedom of movement and residence), 22 (to choose a trade, occupation and profession), 25(1) (no arbitrary depravation of property), 25(2) (impermissible expropriation) and 27(1) (right of access to healthcare) of the Constitution – CON scheme declared unconstitutional and sections 36 to 40 severed from the Act – matter referred to the Constitutional Court for confirmation. 👉: https://lnkd.in/dprSX5am

LIFE ESIDIMENI INQUEST Life Esidimeni Care Centre had a contract with the Department of Health to provide care facilities for the care, treatment and rehabilitation of mental health care users. The patients were moved out of Life Esidimeni, where they stayed for many years, to various non-governmental organisations (NGOs), homes and hospitals. Shortly thereafter they started to die. There was no proper assessment of the NGOs to determine their readiness to receive the patients. New NGOs were not trained to care for them. In the end 141 patients died between the end of April 2016 and January 2017. Ms Mahlangu knew that the patients were vulnerable, however, she took the decision to terminate the contract which resulted in the movement of the vulnerable patients to NGOs which were not ready to care for them; it would make their suffering and deaths probable. Ms Mahlangu confirmed in her evidence that they were vulnerable, experts in the field of psychiatry warned her of the dire consequences that could result, she cannot now distance herself from the entire process, saying that she was not involved in the implementation. There is overwhelming evidence that she chaired regular meetings where reports about the implementation were made to her. She was well-informed of what was happening on the ground. As a result, it is sufficient that she would have foreseen the possibility of death in general. Her conduct is sufficiently closely linked to, or the proximate cause, of the harm suffered. Dr Manamela knew that there were not sufficient beds available for over 1,400 patients to be moved out, but proceeded with the implementation. The department just wanted to move all the patients out of Life Esidimeni facilities and dump them with the inexperienced NGOs who knew nothing about mental health care. Her conduct ultimately resulted in the deaths of patients. The harm would have not occurred without the conduct of Dr Manamela. Therefore, factual causation has been established. Legal causation is also established when one considers the test for legal causation. There was a sufficiently close link between Dr Manamela and the deaths. The court finds that the deaths of nine patients were negligently caused by the conduct of Ms Mahlangu and Dr Makgabo Manamela. Effectively, Ms Mahlangu and Dr Manamela created circumstances in which the deaths of the deceased were inevitable. Section 16(2)(d) of the Inquests Act 58 of 1959 provides for a finding as to whether the death was brought about by any act or omission involving an offence on the part of any person. The court makes positive findings according to section 16(2) in relation to nine of the deaths. Life Esidimeni Inquest (I001/21) [2024] ZAGPPHC 676 (10 July 2024) https://lnkd.in/dHzGRqVi

DISMISSAL FOR VIOLENT PROTEST The announcement in March 2020 of the country-wide lock-down occasioned by the Covid-19 pandemic caused some uncertainty as to the payment of remuneration during the lock-down. Mrs Charnaud arrived at the factory and was advised that the staff had “downed tools”. She and her husband met with staff and she stated that later she was still feeling unwell and left in her car to go to her doctor. Certain of the appellant’s employees rushed out of the factory, locked the gates and surrounded the vehicle. Rocks were placed in the road, the gate was locked, and the vehicle was prevented from leaving. She described how she and her husband were trapped in their vehicle for four hours, in the sun, with no ventilation, surrounded by employees who were aggressive, violent, rocking the car, chanting, pointing fingers and singing. 90 individual respondents (employees) were dismissed.   The appellant’s cost accountant testified how the employees had been identified in photographs and videos taken during the incident. The list identifies the employees by photograph number, employee number, employee first name, and employee surname. He testified that different persons took different photographs and that he was part of a team comprising the factory managers and the production manager, persons who work with the appellant’s employees on a daily basis, who identified individual employees in the photographs. Under cross-examination, he stated that: “You can say for the first time in my working career, I was actually fearing for my life.” The arbitrator accepted the version of the company regarding the identification of the culprits and found that it reasonably identified the offenders in a mass collective misconduct of a violent nature. The employees held two directors of the appellant captive in their motor vehicle for four hours, in the sun, with no ventilation. This in support of an issue that ought properly to have been the subject of further engagement with their employer. A resort to violent protest in the circumstances was an act of serious misconduct for which the sanction of dismissal is undoubtedly an appropriate penalty.