Interim payment I.T.O Rule 34A of the Uniform rules of court

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As you might have heard the Acting Judge Fabricus dismissed the application by the LSSA,SAAPIL and others on 31 March 2010. The Applicants will be appealing directly to the Constitutional Court.

HARMSE v THE ROAD ACCIDENT FUND – 63149/09 [UNREPORTED] – JUDGEMENT 24 FEBRUARY 2010

The applicant approached the court on an urgent basis, for interim payment in terms of rule 34A of the Uniform Rules of Court. The respondent opposed the application.

Initially this application was brought as a normal motion, and was set down for 24 November 2009. On the said occasion, the matter was postponed sine die, and the respondent was ordered to pay the wasted costs.

Subsequent thereto, on 17 December 2009, the applicant launched an urgent application, wherein the applicant claimed interim payment from the respondent in an amount of R25 000. 00, as well as a monthly payment of R2 500. 00 from 1 January 2010 until the main action is determined.

Rule 34A of the Uniform Rules provides:

“(1) In an action for damages for personal Injuries or the death of a person, the plaintiff may, at any time after the expiry of the period for the delivery of the notice of intention to defend, apply to the court for an order requiring the defendant to make an interim payment in respect of his claim for medical costs and loss of income arising from his physical disability or the death of a person.

(4) If at the hearing of such an application, the court is satisfied that the defendant against whom the order is sought has in writing admitted liability for the plaintiff’s damages; or

the plaintiff has obtained judgment against the defendant for damages to be determined,

the court may if it thinks fit but subject to the provisions of sub-rule (5), order the defendant to make an interim payment of suchamount shall not exceed a reasonable proportion of the damages which in the opinion of the court are likely to be recovered by the plaintiff taking into account any contributory negligence, set off or counterclaim.”

From the above, it is clear that a jurisdictional requirement for an interim payment, is an admission of liability in writing by the respondent. The question arises if in the present case there was such an admission.

The applicant relied on a series of settlement negotiations, which culminated in the respondent making a written offer of settlement on a 50% merits apportionment, to prove such an admission. The pinnacle of the applicant’s case in this regard, is an e-mail transmitted on 4 September 2009 by the respondent’s claims handler, Mr. Kenneth Mkhawane which reads:

“The offer for 50% merits apportionment and pre-settlement undertaking has been approved. Upon receipt of your merits acceptance, we will sent the undertaking limited to 50% via post to yourselves.”

On 7 September 2009, the application’s attorney responded to the 50% apportionment offer as follows:

“As per the meeting I confirm that I am not happy with the 50% merits offer apportionment. I have pointed out numerous aspects indicating that the insured driver’s version is not probable.”

The same date, 7 September 2009, a senior claims handler of the respondent, replied to the above email as follows: ” ….I(f) you say that the insured driver’s version is improbable , the same argument can be applied to your client’s version. I will immediately proceed to consider the appointment of a reconstruction expert and assessor to investigate further, which is the procedure to follow when one is faced with contradictory versions.”

On 3 December 2009, at the request of the respondent’s attorney, the applicant’s settlement proposals were reduced to writing and transmitted to respondent’s attorney.

On 9 December 2009, the respondent’s attorney transmitted an e-mail to the applicant’s attorney, with
the following content:

“I have managed to speak to Adv. Bezuidenhout… He informed that we cannot settle the merits for one part of the matter only. If the plaintiff cannot accept the merits in totality we unfortunately cannot assist you in this matter”

From the correspondence three aspects emerge.

First, that the parties were clearly engaged in genuine “without prejudice” negotiations. Therefore those
communications are privileged.

Secondly, there is no consensus on the liability of the respondent for the applicant’s damages. This is confirmed by the respondent’s statement that it considered appointing an accident reconstruction expert to investigate the merits.

Thirdly, even assuming that the respondent, by its offer of a 50% apportionment, had “admitted” liability for the applicant’s damages, the said “admission” was rejected by the applicant’s attorney in the e-mail of 7 September 2009.

The learned Judge found that by rejecting the respondent’s “admission” of liability, while simultaneously seeking to base his rule 34A application on the very same rejected “admission.” The applicant is failing to make an election between the two positions.

The applicant contended that it was competent for the applicant, solely for the purpose of rule 34A interim payment, to rely on the “admitted” 50% apportionment, and claim interim payment thereon, while still at large to negotiate further on the liability and apportionment percentages, in the main action. The learned Judge did not agree with this contention as the provisions of rule 34A (4) are clear, and couched in peremptory terms: only in instances where the respondent had admitted liability for the applicant’s damages, may a court order interim payment. It clearly does not envisage a situation where, the parties being in the process of settlement negotiations, one party latches onto an offer, and seek to enforce it in terms of the rule.

If sustained, the applicant’s argument could have the effect that, once an offer is made in settlement negotiations, in these types of claims, the applicant would be entitled to an interim payment. It is common knowledge that in practice, the respondent, on a daily basis, makes offers in an attempt to settle claims. If the contents of such offers are to be used against the respondent for interim payment, it would most certainly result in the respondent been discouraged to enter into any settlement proposals at all. That would defeat the whole purpose and spirit of “without prejudice” negotiations and offers, as provided in terms of rule 34A.

The application was dismissed costs to be paid by the applicant.

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