THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 1147/2020

In the matter between:
ROAD ACCIDENT FUND

FIRST APPELLANT

THE CHAIRPERSON OF THE BOARD
OF THE ROAD ACCIDENT FUND
SECOND APPELLANT

ACTING CHIEF EXECUTIVE OFFICER
OF THE ROAD ACCIDENT FUND
THIRD APPELLANT

MINISTER OF TRANSPORT                                  FOURTH APPELLANT

and

MABUNDA INCORPORATED AND
41 OTHERS                                                                  FIRST RESPONDENT

FOURIEFISMER INCORPORATED
SECOND RESPONDENT

PRETORIA ATTORNEYS ASSOCIATION         THIRD RESPONDENT

DIALE MOGASHOA INCORPORATED            FOURTH RESPONDENT

Case no: 1082/2020

In the matter between:
MINISTER OF TRANSPORT

APPELLANT

and

THE ROAD ACCIDENT FUND                                     FIRST RESPONDENT

THE CHAIRPERSON OF THE BOARD
OF THE ROAD ACCIDENT FUND
SECOND RESPONDENT

ACTING CHIEF EXECUTIVE OFFICER
OF THE ROAD ACCIDENT FUND
THIRD RESPONDENT

FOURIEFISMER INCORPORATED
FOURTH RESPONDENT

LINDSAYKELLER ATTORNEYS

FIFTH RESPONDENT

PRETORIA ATTORNEYS ASSOCIATION
SIXTH RESPONDENT

MAPONYA INCORPORATED                                SEVENTH RESPONDENT

Neutral citation:  Road Accident Fund and Others v Mabunda Incorporated
and Others (1147/2020); Minister of Transport v Road Accident Fund and
Others (1082/2020) [2022] ZASCA 169 (1 December 2022)

Coram:
ZONDI and GORVEN JJA and MUSI, MAKAULA and MASIPA
AJJA

Heard:
15 August 2022
Delivered: 1 December 2022
Summary:     Appeal – mootness – interpretation of court order setting aside
cancellation of tender – unsuccessful appeal requires tender to be adjudicated –
successful appeal would result in cancellation of tender standing – not moot.
Administrative Law – Review – cancellation of tender by Road Accident Fund
– compliance with Regulation 13(1) of the Preferential Procurement Policy
Framework Act 5 of 2000 – changed circumstances shown – cancellation good.

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Hughes J
sitting as court of first instance):
The appeal under case number 1082/2020 is struck from the roll with
costs.
The application for condonation is granted and the appeal under case
number 1147/2020 is reinstated.
The appeal under case number 1147/2020 is upheld with costs
including those of two counsel where so employed.
The order by the Gauteng Division of the High Court, Pretoria is set
aside and replaced with the following:
‘The applications under case numbers 17518/2020, 15876/2020 and
18239/2020 are dismissed with costs including those of two counsel where so
employed.’

JUDGMENT

Gorven JA and Masipa AJA (Zondi JA and Musi and Makaula AJJA
concurring)

[1] Two appeals were set down for hearing; one under case no. 1147/2020,
and the other under case no. 1082/2020. The Road Accident Fund (the RAF)
is the first appellant in the appeal under case number 1147/2020. The second
and third appellants are the Chairperson of the Board of the RAF and Chief

Executive Officer (the CEO) of the RAF respectively. These appellants shall
be referred to as the RAF. The Minister of Transport (the Minister), who was
the fourth appellant in the previous matter, is the appellant in the appeal under
case number 1082/2020. The two appeals were consolidated. Both appeals
had lapsed and both sets of appellants sought condonation for the late delivery
of the appeal record and the notice of appeal and sought reinstatement of the
appeals. The Minister’s appeal was struck from the roll due to non-
appearance. No more need be said about it. The balance of this judgment deals
with the application for condonation and the appeal of the RAF.

[2] A brief background is necessary. The RAF is a juristic person created
by the Road Accident Fund Act 56 of 1996 (the RAF Act). Its purpose is to
facilitate compensation for damages arising from the negligent driving of
motor vehicles. It is safe to say that it has been the country’s major litigator
for some years.

[3] Pursuant to a tender awarded in 2014, the RAF contracted a panel of
103 attorneys for a period of five years. The procurement of any such panel
must comply with the prescripts of s 217 of the Constitution.1 These attorneys
were to provide specialised legal services to the RAF. Identical Service Level
Agreements (the SLAs) were concluded with the attorneys on the panel.

1 Section 217 of the Constitution of the Republic of South Africa 1996 provides:
‘(1) When an organ of state in the national, provincial or local sphere of government, or any other institution
identified in national legislation, contracts for goods or services, it must do so in accordance with a system
which is fair, equitable, transparent, competitive and cost-effective.
(2) Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from
implementing a procurement policy providing for—
(a) categories of preference in the allocation of contracts; and
(b) the protection or advancement of persons, or categories of persons, disadvantaged by unfair
discrimination.
(3) National legislation must prescribe a framework within which the policy referred to in subsection (2)
must be implemented.’

[4] The SLAs were due to lapse towards the end of November 2019. On
25 July 2019, the interim Board of the RAF notified the attorneys on the panel
to prepare all unfinalised files in their possession for handover by that date. In
preparation for the lapsing of the SLAs, the RAF had put out a new invitation
to tender on 30 November 2018, RAF/2018/00054 (the 2018 tender). This
sought bids for a five year period. The closing date for submission was
28 February 2020, which was subsequently extended to 14 June 2020.

[5] On 19 September 2019, the Board appointed a new CEO. The
following day, the Board sent a letter suspending the instruction of 25 July
requiring unfinalised files to be handed over. On 22 October 2019, the Board
resolved to extend the SLAs to 31 May 2020. On 19 November, the Board
sent an addendum to the SLAs to the attorneys on the panel for signature by
21 November (the second addendum). The second addendum extended the
SLAs to 31 May 2020. It also contained somewhat less generous financial
terms, including a requirement for the attorneys to prepare reports, without
charge, on unfinished matters when the files were handed back to the RAF.
The mandate of the attorneys who signed would therefore terminate by
effluxion of time on 31 May 2020. All of the present attorney respondents (the
panel attorneys) were some of the total of 89 attorneys who signed the second
addendum. Those attorneys who did not sign the second addendum were
obliged to hand back their files and their SLAs lapsed towards the end
of November 2019.

[6] The interim Board of the RAF was replaced by a permanent Board (the
Board) on 5 December 2019. On 12 December 2019, the management of the

RAF made a presentation to the Board giving an overview of its affairs and
its financial status. The presentation reflected income for the period under
review of R28,645 million, expenditure of R74,358 million and a resultant
deficit of R45,713 million. It reported that, for that period, 99.65 percent of
matters set down for trial in the Gauteng Division of the High Court, Pretoria,
settled on the trial day. Only 0.35 percent of matters set down for trial
proceeded. This meant that trial fees were unnecessarily incurred.

[7] As a consequence, the management of the RAF proposed developing a
strategic plan involving an entirely new model of operation, including the
insourcing of legal specialist services, rather than utilising private attorneys.
A strategic plan for the period 2020 to 2025 incorporating the new model was
presented to the Board in December 2019 and was accepted by the Board on
31 January 2020.

[8] On 18 February 2020, the panel attorneys and the others who had signed
the second addendum were notified to begin a phased handover of files, which
was to be completed by 31 May. Due to numerous requests to reconsider the
timeline, a second letter dated 20 February was sent with a new timeline (the
handover decision). On 26 February 2020, the RAF cancelled the 2018 tender
(the tender withdrawal decision). This was communicated to the panel
attorneys and the other signatories to the second addendum. In the
notification, the cancellation was said to be ‘due to unaffordability of services
as advertised in the tender, as well as changed circumstances’.

[9] This prompted three separate applications to the Gauteng Division of
the High Court, Pretoria, seeking to review one or both of the handover

decision and the tender withdrawal decision. Along with these, it was sought
to declare the second addendum unlawful and invalid. The applicants in those
matters were the present respondents and certain other parties. They
contended that the impugned decisions were unlawful on three main grounds:
‘1.
That the impugned decisions are irrational and unreasonable in light of their own purported
objectives.
2.
That the impugned decisions were taken without the first appellant having in place any
proper or adequate plan to deal with the situation after 1 June 2020.
3.
That the impugned decisions are unlawful and invalid for the reasons set out in the first
respondent’s affidavits.’
In addition, the first respondent, Mabunda Incorporated (Mabunda) contended
that the impugned decisions fell to be reviewed and set aside in terms of the
Promotion of Administrative Justice Act 3 of 2000.

[10] The matter was heard by Hughes J who, on 1 June 2020, granted an
order which was subsequently amended, the final and material terms of which
were:
1.
The decision of the respondent communicated in a letter dated 18 February and
20 February 2020 demanding that the panel of attorneys hand over all unfinalised files in
their possession to the respondent is reviewed and set aside.
2.
The decision of the respondent to cancel tender number RAF/2018/00054 on or
about 26 February 2020 is reviewed and set aside.
3.
The panel attorneys on the RAF’s panel as at the date of the launch of the
FourieFismer review application shall continue to serve on the RAF panel of attorneys.
4.
The RAF shall fulfil all of its obligations to such attorneys in terms of the existing
Service Level Agreement.
5.
This order shall operate for a period of six months from this order.
6.
The respondents are ordered to pay the costs of the review application on a party
and party scale, jointly and severally.

7.
Such costs are to include the costs of two counsel for each legal team where so
employed.
It is this order which is appealed against by leave of this Court, leave having
been refused by Hughes J.

[11] Pursuant to s 18(1) of the Superior Courts Act 10 of 2013 (the Act), this
resulted in the order of the high court being suspended. In turn, the panel
attorneys and some other parties launched an application in terms of s 18(3)
of the Act for its immediate implementation. This was granted by Hughes J
but reversed on appeal by the Full Court of the Gauteng Division of the High
Court, Pretoria (the Full Court) in terms of s 18(4) of the Act. The Full Court
granted an order as follows:
‘(a)
The appeal is upheld.
(b)
The order granted by the Court a quo in terms of section 18(3), and the additional
relief in paragraph (e) of the order, is set aside and replaced with the following order:
“The application is dismissed with costs including costs of two counsel.”
(c)
With the exclusion of the Law Society of Southern Africa and the Minister of
Transport, the respondents and other intervening parties shall pay the appellants’ costs of
the appeal jointly and severally the one paying the others to be absolved, which costs shall
include the costs of senior and junior counsel where so employed.’

[12] It is convenient to summarise the grounds on which the respondents
opposed the present appeal. They contended that:
a)
It had become moot;
b)
The cancellation of the 2018 tender was invalid; and
c)
The handover decision was unlawful;
d)
The second addendum was invalid.

[13] The only attorneys who participated in the appeal were the first
respondent, comprising Mabunda Incorporated and forty-one other attorneys
(Mabunda), FourieFismer Incorporated (FourieFismer) and Diale Mogoshoa
Incorporated (Diale). The Pretoria Attorneys’ Association also participated
and was represented by counsel also representing FourieFismer. Other
litigants before the high court elected not to participate any further. In
addition, Diale limited its submissions to the lawfulness of the cancellation of
the tender. By the time the appeal was heard both Diale and FourieFismer had
handed over all of the files they had received from the RAF. Mabunda, on the
other hand, continued to support all of the relief granted.

Whether the appeal is moot
[14] Mabunda and FourieFismer submitted that it is clear that the order was
to operate for a period of six months from the date of issue, being 1 June 2020.
They contended that its operation was not suspended by the application for
leave to appeal. As such, it expired on 1 December 2020. Leaving aside for a
moment the provisions of s 18(1) and the Full Court order made under s 18(4)
of the Act, this still does not resolve all of the issues in the appeal. It is clear
that paragraphs 1, 2, 6 and 7 of the order are outright orders. They are not
limited by the six month period referred to in paragraph 5. The six month
period clearly applies only to paragraphs 3 and 4. The cancellation of a tender,
when set aside as was done by the high court, results in the reinstatement of
the tender. Diale, in particular, claimed that the tender must still be
adjudicated. This leaves the efficacy of the cancellation as a live issue. It is
not necessary to consider the submissions of all of the parties concerning the
effect of a pending appeal and whether it suspends the operation of the six
month period. The point of mootness has no basis.

The cancellation of the 2018 tender
[15] This was assailed on two fronts. First, that the entity which purported
to cancel the tender lacked the authority to do so. Secondly, that the basis for
cancellation did not comply with the provisions of Regulation 13(1) of the
Preferential Procurement Policy Framework Act 5 of 2000.2

Authority to cancel
[16] FourieFismer argued that the decision to cancel the tender was taken by
the CEO and not the Board. Further, that since the Board had not taken the
decision to cancel the tender, its subsequent ratification, which was admitted,
could not validate that decision.

[17] Despite the submission that the CEO took the decision, the evidence is
clear that the BAC did so after the CEO proposed the cancellation. The
decision was communicated to the panel attorneys on 26 February 2020. The
power to cancel had been delegated to the BAC by the Board in 2015 in
accordance with items 8 and 9 of the RAF’s Supply Chain Management
Policy.3 This much was accepted by the panel attorneys. Section 11(1)(h) of
the RAF Act empowers the Board to withdraw or amend any decision made
by virtue of its delegation. The cancellation was subsequently discussed at a
Board meeting on 27 February 2020 and was not withdrawn or amended.

2 The regulations were promulgated under the Preferential Procurement Policy Framework Act 5 of 2000.
3 In terms of paragraph 7.3.4.6 of the Road Accident Fund Supply Chain Management Policy adopted on
9 November 2015, dealing with contract management, ‘the BAC must in respect of proposed contract
cancellation or variation proposals, consider and approve such proposals.’

[18] The high court held that, because a new Board had been appointed after
the delegation had been made, the legal effect was that the delegation fell
away. In this, the high court clearly erred. The fact that the delegation was
made by a previous Board is of no moment. The appointment of a new Board
does not invalidate a delegation by a previous Board. The delegation remains
effective until it is withdrawn or terminated. The contention that the BAC
lacked the requisite authority to cancel the tender is devoid of merit.

Compliance with Regulation 13(1)
[19] The BAC recorded the reasons as being in line with Regulation 13(1)
of the Preferential Procurement Regulations of 2017. That regulation
provides:
‘(1) An organ of state may, before the award of a tender, cancel a tender invitation if-
(a) due to changed circumstances, there is no longer a need for the goods or services
specified in the invitation;
(b) funds are no longer available to cover the total envisaged expenditure;
(c) no acceptable tender is received; or
(d) there is a material irregularity in the tender process’.

[20] In Trencon Construction (Pty) Ltd v Industrial Development
Corporation of South Africa Limited and Another,4 the Constitutional Court
stated that a public body can only cancel a tender if one of the grounds existed
which was stipulated in the regulation at the time. This read as does the present
Regulation 13. However, this Court doubted that dictum and distinguished
that matter in Tshwane City and Others v Nambiti Technologies (Pty) Ltd.5

4 Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa and Another Limited
[2015] ZACC 22; 2015 (5) SA 245 (CC) para 68.
5 City of Tshwane Metropolitan Municipality and Others v Nambiti Technologies (Pty) Ltd [2015] ZASCA
167; 2016 (2) SA 494 (SCA); [2016] 1 All SA 332 (SCA).

Trencon involved the question of whether a substitution order of one tenderer
should have been made rather than with the grounds on which to cancel a
tender. As Wallis JA explained of Trencon:
‘[T]he reality was that a contract had been awarded and it was the intention to proceed with
the work. So cancellation was not an issue. Furthermore the statement in question was
based on a concession by counsel that was accepted as correct without explanation.’6
He saw the wording of the Regulation as permissive rather than peremptory.
He held, however, that the issue need not be decided in that matter since a
change in circumstances had been demonstrated.7 In the present matter, if, on
the facts, the RAF showed that the provisions of the Regulation were complied
with, it will likewise be unnecessary to determine whether the Trencon dictum
binds us. This must be considered next.

[21] As previously indicated, the reasons advanced by the RAF for the
cancellation of the tender at the time were that it was ‘due to unaffordability
of services as advertised in the tender, as well as changed circumstances’.  The
RAF attempted to add two further grounds ex-post facto to allege
irregularities, fraud and corruption in the current model and irregularities in
the existing tender process. These grounds are not considered in this
judgment, as the RAF is bound by the reasons provided in the termination
letters and should generally not be permitted to change or add to them at its
convenience.8

6 Ibid para 29.
7 Ibid para 30.
8 National Lotteries Board v South African Education and Environment Project [2011] ZASCA 154; 2012 (4)
SA 504 (SCA); [2012] 1 All SA 451 (SCA) paras 27-28; National Energy Regulator of South Africa and
Another v PG Group (Pty) Limited and Others [2019] ZACC 28; 2020 (1) SA 450 (CC); 2019 (10) BCLR
1185 (CC) para 39.

[22] The grounds advanced by the RAF were twofold. First, that set out in
Regulation 13(1)(a) that, due to changed circumstances, there is no longer a
need for the goods or services specified in the invitation to tender. Secondly,
that set out in Regulation 13(1)(b) that funds are no longer available to cover
the total envisaged expenditure. We shall deal with each of these in turn.

Changed circumstances
[23] The RAF claimed that it had adopted a new model to facilitate the
compensation of qualifying persons. It will be recalled that, in January 2020,
the Board adopted a strategic plan for 2020 to 2025. The new model was
devised to give effect to the strategic plan. It entailed taking measures to settle
claims within 120 days, failing which to attempt to resolve matters through
mediation. Use was to be made of in-house attorneys and the state attorney.
The new model was aimed at reducing costs since it was evident that the
existing model had not proved to be cost effective. Only in instances where
those measures failed would the services of private attorneys be engaged.

[24] FourieFismer contended that there was nothing to show that there was
no longer a need for the services specified in the tender due to changed
circumstances. It submitted that it was not in dispute that the RAF would still
be engaged in litigation in spite of the new model. Consequently, the services
of attorneys would be required. Diale’s argument was that the changed
circumstances must result in the RAF no longer requiring the services of any
attorneys. It submitted that this was not the case, since the RAF would still
require the services of attorneys.

[25] Neither of these submissions is correct. The tender invited bids for a
panel of attorneys based on the old model of operation. The fact that, as a last
resort, the RAF might have to engage the assistance of private attorneys does
not negate the fact that, under the proposed new model, most, if not all, of the
attorneys utilised would either be in-house employees or provided by the State
Attorney. It certainly cannot be said that, because the RAF envisaged utilising
attorneys at all, the circumstances under which it had issued the tender had
not changed. It seems to us that this showed that the circumstances to be
ushered in by the new model had changed significantly.

Required funds no longer available
[26] In addition to the RAF showing that there were changed circumstances
warranting the cancellation of the tender, it also relied on the reason that funds
were no longer available to cover the total envisaged expenditure. The
presentation of management to the Board in December 2019 has already been
mentioned where, for the period under review, a deficit of R45,713 million
had accrued.

[27] It is common cause that the RAF has been technically insolvent for
many years. But the repeated deficits have seemingly been exacerbated by the
mounting legal fees which the RAF has been obliged to meet; both those of
the attorneys on the panel and those of attorneys and counsel representing
claimants. According to an article written by Professor Hennie Klopper, a
professor emeritus at the University of Pretoria,9 there had been a reduction in
claims lodged but legal costs increased exponentially. In 2005, 185 773 claims

9 H Klopper ‘Is the Road Accident Fund’s litigation in urgent need of review?’ De Rebus March 2019.

were lodged with attendant legal costs of up to R941 million. In 2018, there
were only 92 101 claims lodged and legal costs of R8.8 billion were incurred.
By 2019, legal costs had increased to R10.6 billion.

[28] The panel attorneys contended that the article of Professor Klopper did
not constitute admissible evidence. They did not, however, challenge the
figures put up by him. They submitted, in addition, that the RAF has for many
years been operating at a deficit and the present situation is not a new one. But
that is to conflate changed circumstances with the enquiry whether there are
sufficient funds to meet the total envisaged expenditure. For many years, the
RAF has lacked such funds. That this still obtained at the time the decision
was taken is made clear by the report to the Board mentioned above, even if
no regard is had to the article of Professor Klopper.

[29] All of this means that two of the jurisdictional facts referred to in
Regulation 13 existed at the time the decision to cancel the tender was made.
One such fact is sufficient to entitle the Board to cancel the tender. As such,
Regulation 13 provided grounds for cancellation and the review of that
decision should have failed. For these reasons, the present matter echoes that
of Nambiti Technologies and no further engagement need take place regarding
the dictum in Trencon.

The handover decision
[30] No argument was advanced at the hearing on this issue. Presumably this
was because both FourieFismer and Diale had already handed over their files.
As regards Mabunda, it argued that both the handover decision and the second
addendum were unlawful. Since the handover decision gave effect to the

second addendum, it follows that if the latter should have been set aside, the
former would follow suit.

The second addendum
[31] The complaint was that the RAF had changed certain terms concerning
fees which the panel attorneys were entitled to charge under the original
SLAs. That may be so, but the panel attorneys all signed the second
addendum, thus amending the original SLAs. Those who refused to do so
simply handed back their files prior to the original November 2019 date at
which their SLAs expired.

[32] It bears mention that the high court did not review and set aside the
second addendum. It is trite that appeals lie against orders and not against
reasons for the judgment.10 There is therefore no need to pronounce on this
issue, even if strong indications emerge from the judgment of the high court
that the second addendum was not lawful. As such, even if the panel attorneys
could make out a case for the unlawfulness of the second addendum, the issue
was not before us on appeal. In any event, as indicated above, we hold the
view that no case was made out in the applications for any such order or
finding.

The reinstatement of the appeal
[33] As was indicated at the outset, the appeal had lapsed. The RAF brought
a substantive application for its reinstatement setting out the reasons for the
non-compliance. The principles applicable for the granting of condonation are

10 Absa Bank Ltd v Mkhize [2013] ZASCA 139; 2014 (5) SA 16 (SCA) para 64; Cape Empowerment Trust
Ltd v Fisher Hoffman Sithole [2013] ZASCA 16; 2013 (5) SA 183 (SCA) para 39.

well known and we do not propose traversing them. The ground of opposition
by Mabunda and FourieFismer was that the appeal was moot. In addition,
Mabunda contended that the failure to comply with the rules was wilful.
Finally, FourieFismer opposed the application since, in its view, it was based
on an application by the RAF to lead further evidence on appeal.

[34] This latter application fell away so that ground of opposition need not
be dealt with. The issue of mootness was disposed of earlier in this judgment.
Where there is non-compliance with procedural requirements of the court,
satisfactory explanations must be provided. The court has an overriding
discretion to consider all circumstances of the case.11 The overriding factor
was set out in Van Wyk v Unitas Hospital (Open Democratic Advice Centre
as Amicus Curiae)12 as being the interests of justice. The RAF gave a cogent
explanation for its default. In addition, we are of the view that, in the light of
the issues in this matter and the order of the high court which had the effect
of reinstating a tender which had been validly cancelled, it is in the interests
of justice that condonation is granted. Finally, the prospects of success weigh
in favour of granting condonation and reinstating the appeal.

The continued operation of the SLA
[35] Much argument was directed at the six month period in the order of the
high court. Most of this argument related to the effect of the grant of leave to
appeal and whether it suspended this part of the order. It will be recalled that
this related to paragraphs 3 and 4 of the order:

11 See Shaik and Others v Pillay and Others 2008 (3) SA 59 (N) at 61E-F.
12 Van Wyk v Unitas Hospital (Open Democratic Advice Centre as Amicus Curiae) [2007] ZACC 24; 2008
(2) SA 472 (CC) at 477 A-B.

3.  The panel attorneys on the RAF’s panel as at the date of the launch of the
FourieFismer review application shall continue to serve on the RAF panel of
attorneys.
4.  The RAF shall fulfil all of its obligations to such attorneys in terms of the
existing Service Level Agreement.

[36] The second addendum extended the SLAs to 31 May 2020. On that
date, on any version, the extended SLAs lapsed through effluxion of time.
This much was common cause. The orders referred to above were clearly
geared at attempting to maintain the status quo during the six month period so
that the RAF could give effect to the tender reinstated by the order of the high
court. However, the high court order was handed down on 1 June 2020. By
that date, there were no SLAs to extend. This means that paragraphs 3 and 4
were clearly incompetent. In the first of these, the high court purported to
make a contract for parties who were no longer contractually bound to each
other.13 The second of these referred to the terms and conditions which were
to govern such a contract, if one was in existence, but did so by reference to
‘the existing Service Level Agreement’. There was, of course, no such
agreement in operation on that date. As a result, those orders must also clearly
be set aside on appeal.

[37] Whatever regulated the relationship between the parties after
1 June 2020 will have to be debated between the parties since no contract
referred to in the papers governed their conduct. One can only express a strong
desire that they arrive at an equitable outcome.

13 Bellville-Inry (Edms) Bpk v Continental China (Pty) Ltd 1976 (3) SA 583 (C) at 591H – 592A.

[38] For all the above reasons, we are satisfied that the RAF has made out a
case for the relief sought. The appeal should therefore succeed and the costs
should follow the result.

In the result, the following order issues:
The appeal under case number 1082/2020 is struck from the roll with
costs.
The application for condonation is granted and the appeal under case
number 1147/2020 is reinstated.
The appeal is upheld with costs including those of two counsel where
so employed.
The order by the Gauteng Division of the High Court, Pretoria is set
aside and replaced with the following:
‘The applications under case numbers 17518/2020, 15876/2020 and
18239/2020 are dismissed with costs including those of two counsel where so
employed.’

________________________
T R GORVEN
JUDGE OF APPEAL

________________________
M B S MASIPA
ACTING JUDGE OF APPEAL

Appearances

For appellants:
CE Puckrin SC with R Schoeman and
NC Hartman
Instructed by:

Mpoyana Ledwaba Inc, Pretoria
Modisenyane Attorneys Incorporated,
Bloemfontein

For first respondent:
WR Mokhare SC
Instructed by:

Mabunda Incorporated, Bedfordview

Webbers Attorneys, Bloemfontein

For second & third respondents:
EC Labuschagne SC
Instructed by:
FourieFismer Inc, Pretoria

E Horn, Bloemfontein

For fourth respondent:
K Tsatsawane SC
Instructed by:

Diale Mogashoa Attorneys, Pretoria

Honey Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
1 December 2022
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.

Road Accident Fund and Others
v
Mabinda Incorporated and Others

Minister of Finance
v
Road Accident Fund and Others

Today the Supreme Court of Appeal upheld an appeal from the Gauteng Division of
the High Court, Pretoria (per Hughes J). The Road Accident Fund (the RAF) was
formed to facilitate payment of compensation to victims of road accidents. In 2014,
the RAF appointed a panel of attorneys to represent it in litigation for five years. The
resultant Service Level Agreements (the SLAs) were due to elapse in November
2019. A new tender (the 2019 tender) was advertised. After a new Chief Executive
Officer (the CEO) was appointed to the RAF, he conducted a review of its affairs and
model of operation. The RAF offered to extend the SLAs to 31 May 2020 to afford
time to consider the position. Certain attorneys on the panel agreed to this, despite
there being less financial reward. Those who did not handed but unfinalised files and
the SLAs lapsed. The CEO concluded that the model of using a panel such as that

was inefficient and unduly costly. This resulted in a new five year strategic plan being
presented to and accepted by the Board of the RAF. As a consequence, the 2019
tender was cancelled and the remaining attorneys were requested to hand back their
files of unfinalised matters in a phased way.

The present respondents were attorneys who had agreed to the extension of the
SLAs. Three separate applications by various of these respondents were launched
in the high court to review and set aside the cancellation of the 2019 tender, the
decision to extend the SLAs on those less favourable terms and the decision to call
for the unfinalised files. On 1 June 2020, Hughes J granted the review relief and
attempted to fashion an order maintaining the status quo pending the revival and
adjudication of the 2019 tender. Part of this relief was a direction that the SLAs be
extended for a period of six months on the same terms and conditions as the existing
ones. Her reasoning was that the entity in the RAF which had cancelled the 2019
tender lacked the authority to do so. This entity had been authorised by the Board to
do so but Hughes J reasoned that, since the resolution doing so had been passed
by the previous Board of the RAF, it had fallen away when the new Board had been
appointed. The respondents had also relied on the provisions of a regulation under
the Preferential Procurement Policy Framework Act 5 of 2000. This allowed an entity
such as the RAF to cancel an unawarded tender if, inter alia, due to changed
circumstances, there is no longer a need for the services in question or funds are no
longer available to cover the total envisaged expenditure.

A hiatus had been caused by the fact that the order of the high court was dated
1 June 2020 whereas the SLAs had lapsed by effluxion of time on 31 May 2020. This
meant that that part of the order purporting to extend the SLAs was not competent
because they were no longer extant at the date of the order. The Supreme Court of
Appeal expressed a strong desire that the parties agree on what should be done
relating to the work done by the remaining attorneys in the interim.

The Supreme Court of Appeal held that the authorisation of the entity in the RAF
which had cancelled had not lapsed when a new Board had been appointed. It also

found that the new model adopted by the RAF of attempting to settle claims, and if
that failed, to mediate them and if that failed to utilise in-house attorneys and the
State Attorney to litigate constituted changed circumstances. It also held that the
unchallenged evidence that the RAF had been technically insolvent for a number of
years coupled with evidence that, in the period under review the previous year, the
RAF had run up a further deficit of R45,713 million also demonstrated that there
were insufficient funds to cover the expenditure envisaged. The RAF had accordingly
been entitled to cancel the 2019 tender. The live nature of the tender militated
against upholding an argument by the respondents that the appeal was moot.  The
decision to extend the SLAs had been agreed to by the respondent attorneys and
could not be assailed. As a consequence, the appeal of the RAF was upheld with
costs and the judgment of the high court set aside and substituted by one dismissing
the applications with costs.