Crash: The Road Accident Fund was set up in 1996 to protect road users but it appears to be in such serious financial trouble its assets are being auctioned to recoup funds due to victims. Photo: Nelius Rademan/Gallo
The Johannesburg high court has ordered the Road Accident Fund (RAF) to release information related to the “theft” of more than R1.7 million meant to be an accident victim’s payout.
The RAF lost the first round in a protracted lawsuit on how it entered an agreement with lawyer Masakhe Tengwa, who was not legally appointed to represent Johannes Thwala, who was in a car accident and who has not received his payout almost two years since the fund said it released the money.
The RAF was also slapped with a costs order after denying that it acted illegally in not paying out money to Thwala’s appointed lawyer, instead handing the funds to Tengwa.
The lawsuit comes in the wake of the Special Investigating Unit’s (SIU) inquiry into how court sheriffs and 102 law firms received about R340 million in duplicate payments through abuse of the fund by lawyers.
In his founding affidavit, Sifiso Ntshangase of SS Ntshangase Attorneys, which sued the RAF, stated that on 28 August 2016 the firm received instructions from Thwala, who had been injured on 15 March 2016, to prosecute the fund.
Ntshangase said Thwala did not receive the more than R1.7 million payout after Tengwa, who was nominated as the attorney to receive the money in a trust account, entered an allegedly invalid agreement with the RAF in August 2020. The fund and Tengwa, without providing evidence, stated that the latter was now Thwala’s legal representative.
Ntshangase’s affidavit further states that various medical reports recommended that Thwala have a curator appointed to assist him with the legal action that Ntshangase had instituted against the RAF.
The high court appointed advocate Jabulani Luvuno as the curator based on neurologist Dr Kevin Rosman’s report that given Thwala’s “low level of education, as well as the severe brain injury, he is thought incapable of following the legal process”.
Rosman’s findings were echoed by psychiatrist Dr Gary Fine, who said Thwala required “protection for any large sum of money awarded”, adding that he needed a court-appointed curator.
Ntshangase’s high court application on behalf of Thwala was against Tengwa, the RAF and Luvuno, with the Legal Practice Council, which regulates the country’s law professionals, also cited.
In August 2022, the RAF paid more than R1.7 million to Tengwa’s trust account, but Ntshangase and Thwala were not informed, nor was Luvuno as the court-appointed curator.
“I put it on record that before this application was instituted, advocate Luvuno was notified [of the RAF’s payout] — we informed him about the funds payment amount of R1 779 329.20 into the account of Mr Tengwa and asked if he was informed by Tengwa about the payment, and also requested him to call upon Tengwa to account to him as the curator,” Ntshangase’s affidavit stated.
In court filings, Ntshangase said the settlement agreement reached between Tengwa and the RAF on 28 August 2020 was invalid and had “no force or effect as [his] client”.
Ntshangase appealed to the high court to direct Tengwa “to provide the fourth respondent [Luvuno] with an adequate and full statement of accounts relating to the monies paid by Road Accident Fund into his account on 1 August 2022 as compensation for the injuries sustained by Mr Thwala, and for which a claim had been lodged with the fund on Thwala’s behalf by the applicant [Ntshangase]”.
In a responding affidavit, Luvuno confirmed that he had been appointed to be Thwala’s curator, because medical experts found him to be incapable and after Ntshangase had settled the issue of liability.
“Matter took a strange turn in the latter part of 2020 when the applicant [Ntshangase] informed me that the first respondent [Tengwa] served a termination mandate and was alleging that he had been approached by the patient [Thwala] and was engaged to act out on his behalf,” Luvuno stated.
He added that, a few days later, on 19 October 2020, Tengwa informed Ntshangase that he had settled the matter with the RAF.
In response, Tengwa said in an affidavit that he had all court documents filed by Ntshangase.
Tengwa added: “Where I fail to deal with one or more of the allegations contained therein, such failure shall not be constructed as an admission thereto, but be regarded as being denied by me.”
In the affidavit, Tengwa said that in August 2020, he concluded the settlement agreement with the RAF on behalf of Thwala, who had instructed him to do so.
“On 24 August [2022], the fund made a payment settlement into the trust account of Tengwa Attorneys. I never acted on behalf of Mr Thwala in my personal capacity nor was the payment made into my personal account,” he stated.
For its part, the RAF, through its acting senior manager of claims, Brett Phillips, confirmed in an affidavit that the fund paid the said amount into Tengwa Attorneys in August 2022.
Moreover, Phillips said Ntshangase approached the fund to investigate an allegation of impropriety regarding the change of mandate from SS Ntshangase Attorneys to Tengwa Attorneys. The RAF manager said Ntshangase alleged fraudulent power of attorney and possible “touting” by Tengwa Attorneys.
Touting in law is essentially the illegal advertising or approach to offer professional services.
“The fund humbly submits that at the time that the final settlement with Tengwa was entered into, the duly appointed curator was aware of the mandate given by Thwala to Tengwa Attorneys. Furthermore, the fund submits that there is no basis for this application and prays that this application is dismissed with costs,” Phillips said.
But, on 19 February, Judge Motsamai Makume dismissed the RAF’s contentions, ordering it to give Ntshangase all the statements and documents he requested pertaining to the allegedly invalid settlement agreement between it and Tengwa, as well as statements on the R1.7 million payout.
“The second respondent [the RAF] is compelled to grant access to the documents requested by the applicant in the notice of rule 35(12) dated 26 September 2023, in particular produce the findings of its forensic investigation within 10 days and also pay the costs of this application,” Makume ordered.
Last year, the SIU said it had recovered about R18 million from the R340 million in duplicate payments the RAF had made to law firms. The investigating unit added that it had also entered into acknowledgement of debts valued at R68 million with law firms that conceded their part in the graft.
“The signing of [acknowledgement of debts] does not absolve the legal practitioners from any civil litigation that the SIU may institute or refer for criminal prosecution or being reported to a regulatory body, in this case, the Legal Practice Counsel,” the unit stated.
“So far, the SIU has made one referral to the National Prosecuting Authority [NPA] for evidence pointing to criminal conduct. There are 10 possible NPA referrals identified and five possible referrals to the Legal Practice Counsel.”