Two car accident victims, who have been waiting to receive the interest payments on their claims - totalling about R2 million - from the Road Accident Fund, have turned to court to have its CEO Collins Letsoalo imprisoned for not paying them.
But the Gauteng High Court, Pretoria, in dismissing the application, said the RAF cannot alone be held accountable for its state of affairs.
Judge Denise Fisher said it is clear that the RAF is technically insolvent and unable to pay certain judgment debts against it, including those of the applicants.
The fund is a component of a central, State-run social security scheme which demands legislative and executive co-operation in accordance with the Constitution, she said.
“The constitutional right to which victims of motor vehicle accidents are entitled is the right to have access to a social security insurance fund which is financially viable and which has a compensation scheme that is fair, equitable and sustainable. This constitutional duty can only be realised with legislative and executive co-operation.”
She held that a constitutional challenge in respect of this right cannot be launched without an inclusive approach and a holistic challenge to failings in the scheme.
“The RAF cannot be singled out as the state organ which must take direct and exclusive accountability for the failure of a scheme which has long been acknowledged to be interim in nature, underfunded, and presently unsustainable.”
This must not be interpreted to allow impunity for mismanagement by the RAF, she warned, but said the application fails to allow for the location of the constitutional right with reference to the complex inter-governmental duties which are the source and origin of a social system which is meant to insure those who suffer injury and damages as a result of motor vehicle against their loss.
In turning down the application, she found that the transport minister, as the member of the National Executive responsible for the administration of the RAF Act, should have been joined by the two applicants as a party to these proceedings.
The two accident victims each received judgment in their favour in 2019 -- with the one owed R11.1 million and the other R1.8 million.
The capital amounts were paid by the fund, but the interest on these amounts are currently standing at respectively R1.6m and R400 000 and remain unpaid.
The pair wanted the court to hold the fund and Letsoalo in contempt and issue a suspended sentence on the latter, which would kick in if he continued non-payment.
The applicants argued that the non-payment is not merely a debtor’s delinquency but also conduct which is inconsistent with the constitutional function and duty of the RAF.
According to them, this failure on behalf of the RAF and its board, warranted imprisonment of its CEO.
Judge Fisher said it is common cause that the RAF’s bank accounts, as at the date on which execution was attempted by the applicants, were empty.
It is suggested by the applicants that it may be that the RAF’s cash reserves have been put beyond execution. There is, however, no evidence of any secreting away of reserves, the judge said.
The central argument of the fund is that the temporary insufficiency of funds which occasioned the failure to pay is a feature of administering a fund which is insufficiently funded by the state.
While the RAF has apparently been reluctant to admit bankruptcy in these and other proceedings, there is no option but for this position to be met head-on, Judge Fisher said.
“The RAF cannot, seriously, deny that it is unable to pay its debts as and when they fall due and thus that it is technically insolvent.”
It appears that this insolvency is snowballing out of control in the constitutional era, she said, but this crisis has, however, been decades in the making.
“From the history, long past, and, more recent, it is clear that it cannot be in dispute that the current board, as many of its predecessors, inherited a fund which was insolvent.
“Whether the board and its CEO are managing the fund in a manner which is optimal is not the subject of this judgment s…
“The minister has not been joined and, thus, there has been no information provided by the state as to the current status of and developments in the broader social insurance scheme proposed in 2009,” she said.
In turning down the application, Judge Fisher said it is not in dispute that certain judgment debts against the RAF are not being met. “That this is, on the face of it, a failure of social justice is undeniable.”
She, however, concluded that any such constitutional failure would, it seems, reside in the failure of all components of the scheme and not only the RAF.
“The responsibility for such failure accrues at various levels and in a number of spheres of government,” she said.
Pretoria News