THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 463/2015

In the matter between:

ROELOF ERNST BOTHA

APPELLANT

and

ROAD ACCIDENT FUND

RESPONDENT

Neutral Citation:
Botha v Road Accident Fund (463/2015) [2016] ZASCA 97
(2 June 2016).
Coram:

Leach, Saldulker, Dambuza JJA and Fourie and Victor AJJA
Heard:

18 May 2016
Delivered:

2 June 2016

Summary: Contract ─ agreement in settlement of claim for damages made an order
of court ─ agreement concluded on the strength of a representation of fact made by
appellant’s attorney relied on by the respondent ─ agreement binding and not to be
set aside under Uniform rule 42(1)(c).

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from:    Gauteng Division of the High Court, Pretoria (Hughes J, sitting
as court of first instance):

The appeal is dismissed with costs including the costs of two counsel.
___________________________________________________________________

JUDGMENT
___________________________________________________________________

Leach and Dambuza JJA (Saldulker JA and Fourie and Victor AJJA
concurring):

[1] The issue in this appeal is whether the appellant is bound by a settlement
agreement concluded with the respondent pursuant to a misrepresentation the
appellant had made as to certain material facts. The agreement was made an order
of court but the appellant subsequently applied for rescission or variation of that
order under Uniform rule 42(1)(c). The application was dismissed. The appeal comes
before us with the leave of the court a quo.

[2] The appellant and his wife sustained serious bodily injuries in a motorcycle
accident. They then instituted separate actions against the respondent, the Road
Accident Fund, for damages suffered as a result of their injuries. Both claims were
defended by the respondent. On 3 March 2014, both cases came to trial before
different judges in the Gauteng Division, Pretoria. The respondent conceded liability
for whatever damages the appellant and his wife were able to prove. The appellant’s
wife’s claim then went to trial before Pretorius J for determination of her damages.
Judgment in that matter was reserved.

[3] In the meantime, parties entered into negotiations in regard to the appellant’s
claim which was due to be heard by Molefe J. As I have said, the respondent
conceded liability leaving only the quantum of the appellant’s damages in issue. The
appellant’s claim for general damages was agreed at R1 million and his claim for
past hospital and medical expenses was settled in an amount of R236 922.70, this
despite the claim at that stage only being one for R150 000. The respondent,
however, was persuaded to accept liability for the higher amount in the light of
vouchers and documentation presented by the appellant’s attorney. The respondent
also furnished an undertaking in respect of the appellant’s future hospital and
medical expenses in terms of provisions of s 17(4)(a) of the Road Accident Fund Act
56 of 1996. Thus the only outstanding item of damages related to the appellant’s
claim for loss of future earnings. The parties agreed to separate that claim from the
other heads of damages under the provisions of Uniform rule 33(4), and to postpone
the trial to determine those damages at a later stage. However, the respondent
agreed to pay the appellant the sum of R1 236 922.70 in respect of his past medical
expenses and general damages and to furnish the aforementioned undertaking. This
agreement was embodied in the order Molefe J then issued by consent.

[4] Subsequent to payment by the respondent of the amounts agreed, the
appellant’s attorneys ascertained that the amount of R236 922.70 paid by the
respondent in respect of the appellant’s past hospital and medical expenses,
represented only a portion of the actual expenses incurred by the appellant, which in
fact totalled R784 278.78. On investigation, the appellant‘s attorney discovered that
source documents relating to some of the expenses incurred in respect of the
appellant’s hospital and medical expenses had been placed in his wife’s file and had
not been presented to the respondent when the settlement was negotiated.

[5] The appellant’s attorney then wrote to the respondent’s attorneys advising
them of this ‘mutual error’. He proposed that the court order obtained on 3 March
2014 be rescinded by agreement and that it be replaced by a court order reflecting
an amount of R784 278.78 for past medical and hospital expenses. The respondent
refused to agree, stating that as the agreement had been made an order of court, it
was res judicata.

[6] It is against this background that appellant’s attorneys approached the court a
quo seeking rescission or variation of the aforesaid court order under Uniform rule
42(1)(c), contending ‘there had been a mistake common to the parties’ which
rendered the settlement agreement void.

[7] The application was opposed by the respondent, who maintained that the
appellant (or his attorney) had misrepresented the facts on which the settlement had
been rendered. The court a quo dismissed the application and found that the source
documents relating to the unclaimed portion of the expenses constituted evidence
that ‘came to the fore after the court [had] considered the vouchers and given
judgment on same’. Consequently, the court held, the mistake relied upon by the
appellant was a ‘retrospective mistake by means of fresh evidence’.

[8] In seeking relief under Uniform rule 42(1)(c), the appellant was obliged to
show that the settlement agreement had been concluded as a result of a mistake
common to both himself and the respondent as to the correct facts. In attempting to
do so the appellant relied heavily on this court’s decision in Tshivhase Royal Council
& another v Tshivhase & another; [1992] ZASCA 185; 1992 (4) SA 852 (A). In that
case Nestadt JA, writing for the court, described a mistake common to the parties as
envisaged by the rule as a ‘common mistake’ as understood in the field of contract,
which occurs where both parties are of one mind and share the mistake.1 He held
further that where both sides had assumed a state of affairs that turned out to be
wrong, the court was entitled to set aside an order made on the basis of their
common mistake.

[9] Tshivhase, however, is clearly distinguishable from the present matter. There
both parties had acted in error on the strength of a representation made by a third
party. Theirs was thus a common mistake of fact which vitiated their agreement. That
is not here the case. In the present matter the error may be described as being a
‘unilateral mistake’ in that it was made by the appellant’s attorney who, through his
misrepresentation, induced the respondent to contract on the terms they did. And
this difference is fatal to the appellant’s claim.

1 Tshivhase Royal Council v Tshivhase supra at 863A-B.

[10] Under the so-called reliance theory, if there is a material mistake by one party
to a contract and therefore no actual consensus, the contract will be valid if the other
party reasonably relied on the impression that there was consensus.2 This was
recognised by this court in Sonap Petroleum (SA) (Pty) Ltd (formerly known as
Sonarep (SA) (Pty) Ltd) v Pappadogianis [1992] ZASCA 56;1992 (3) SA 234 (A) at
239A. In that case, a mistake made by a firm of attorneys representing the appellant
(a lessor of property) resulted in an erroneous reduction of the term of a property
lease from 20 to 15 years. The respondent (the lessor) insisted that no mistake had
been made. This led to the appellant seeking an order of rectification of the
agreement by replacing the term of 15 years with 20 years. On appeal against the
dismissal of that claim, this court found that there had been no common intention to
agree on the 20 year term. More relevant for the issues at hand, the court defined
mistake as implying a ‘misunderstanding, misrepresentation, and resultant poor
judgment’,3 Harms AJA expressed the test as to whether reliance on a mistake
entitles a party to resile from a resultant agreement as follows:
‘. . . did the party whose actual intention did not conform to the common intention expressed,
lead the other party, as a reasonable man, to believe that his declared intention represented
his actual intention? . . . To answer this question, a three-fold enquiry is usually necessary,
namely, firstly, was there a misrepresentation as to one party’s intention; secondly, who
made that representation; and thirdly, was the other party misled thereby? . . . The last
question postulates two possibilities: Was he actually misled and would a reasonable man
have been misled?’4 (Footnotes omitted.)

[11] In this case the answers to these questions are self-evident. It was not
suggested that a reasonable man would not have accepted the facts presented to
the respondent’s attorneys, or that a reasonable man would have realised that there
was a real possibility of a mistake in the amount of expenses the appellant’s attorney
requested to be paid. The misrepresentation by the appellant misled the respondent,
and this resulted in the conclusion of the settlement agreement. The appellant
cannot rely on his own mistake to avoid the contract which was solely his fault.  As
stated by Christie: 5

2 S W van der Merwe et al Contract: General Principles 4 ed (2012) at 33.
3 At 238H.
4 This test being an adaptation of a dictum by Blackburn J in Smith v Hughes (1871) LR 6 QB 597 at
607 (at 239I-240B).
5 R H Christie & G B Bradfield Christie’s the Law of Contract in South Africa (2011) 6 ed at 329-330.

‘However material the mistake, the mistaken party will not be able to escape from the
contract if his mistake was due to his own fault. This principle will apply whether his fault lies
in not carrying out the reasonably necessary investigations before committing himself to the
contract, that is, failing to do his homework; in not bothering to read the contract before
signing; in carelessly misreading one of the terms; in not bothering to have the contract
explained to him in a language he can understand; in misinterpreting a clear and
unambiguous term, and in fact in any circumstances in which the mistake is due to his own
carelessness or inattention, . . . ’

[12] In the light of this, the appellant sought refuge in an argument that both
parties had assumed that the documents supporting the figure agreed in respect of
past hospital and medical expenses were the only documents that were relevant and
consequently that the compromise was concluded based on an incorrect
assumption. However, as pointed out by this court in Van Reenen Steel (Pty) (Ltd) v
Smith NO & another [2002] ZASCA 12;  2002 (4) SA 264 (SCA), this was no more
than an assumption based on an unilateral mistake.6 And as Harms JA said in that
case:7
‘The first problem facing the appellants is that they are unable to rely on a unilateral mistake
because, as mentioned, the respondents were not the cause of the mistake in the sense
discussed in Sonap Petroleum (SA) (Pty) Ltd (formerly known as Sonarep (SA) (Pty) (Ltd) v
Pappadogianis; 1992 (3) SA 234 (A). The next problem is that it is common cause that the
written contract expresses the parties’ consensus.’
The argument that there was a mutual mistaken assumption is no more than an
attempt to clothe a unilateral mistake in another garb. For the reasons already set
out the appellant’s mistake does not void the agreement.

[13] Confronted with all these difficulties the submission on behalf of the appellant
was that this court should use its discretion under rule 42(1) to set aside the
judgment although the settlement agreement was binding. In Theron NO v United
Democratic Front (Western Cape Region)& others 1984 (2) SA 532 (C) at 536G this
court held that a court has a discretion whether or not to grant an application for

6 Paragraph 9.
7 Paragraph 7.

rescission under rule 42(1). But where, as here, the court’s order recorded the terms
of a valid settlement agreement,8 there is no room for it to do so.

[14] The appeal is dismissed with costs including the costs of two counsel.

____________________
L E LEACH

____________________
N DAMBUZA
JUDGES OF APPEAL

8 Eke v Parsons [2015] ZACC 30; 2015 (11) BCLR 1319; (C) 2016 (3) SA (CC).

APPEARANCES:

For the Appellant:

J C Bergenthuin
Instructed by:
Van Zyl Le Roux & Hurter, Pretoria
c/o Honey Attorneys, Bloemfontein

For the Respondent:

N G D Maritz SC; J Lingenfelder
Instructed by:
Diale Mogashoa Attorneys, Pretoria
c/o McIntyre & Van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:  The Registrar, Supreme Court of Appeal
Date:  2 June 2016
Status:  Immediate

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal

Neutral citation: Botha v Road Accident Fund (436/2015) [2016] ZASCA 97 (2 June 2016)

The appellant in this case was severely injured in a motorbike accident. He sued the
respondent, the Road Accident Fund, for damages and the matter proceeded to trial. At the
hearing, it was agreed that the RAF was liable in full for whatever damages the appellant had
suffered. The parties negotiated a settlement that the appellant’s general damages were R1
million while his past hospital and medical expenses were R236 922.70. The only
outstanding item of his damages was a claim in respect of future loss of earnings. This claim
was separated from the other heads of damage and the hearing on that issue postponed for
later decision, with an order being issued by consent that the RAF pay the appellant
R1 236 922.70 in respect of the agreed heads of damage. This amount was paid to the
appellant shortly thereafter.

The appellant’s attorneys then ascertained that through a mistake on their part they had failed
to include additional past hospital and medical expenses in the appellant’s claim, and that the
actual loss suffered by the appellant in respect of those costs was in fact R784 278.78. The
appellants then applied under Uniform rule 42 for an order rescinding or varying the court
order that had been granted, alleging that there had been a mistake common to the parties
which rendered their settlement agreement void. This application was dismissed and the
appellant appealed to the Supreme Court of Appeal.

The Supreme Court of Appeal today dismissed the appellant’s appeal. It found that there had
not been a ‘common mistake’ but merely a mistake on the part of the appellant’s attorney,
and that there was nothing to suggest that the RAF realised that there had been a real
possibility of a mistake in the amount of the expenses the appellant’s attorney had requested
should be paid. This was a misrepresentation by the appellant that misled the respondent and
had resulted in the conclusion of the settlement agreement which had been made an order of
court. In the light of various authorities, the appellant could not rely on his own mistake to
avoid the contract. The court also held that there had not been an underlying common but
mistaken assumption in regard to the actual past hospital and medical expenses, and that the
argument in that regard had been no more than an attempt to clothe the unilateral mistake
made by the appellant in another garb. The appeal was therefore dismissed.
---ends---