Elmarie Slabbert sued the MEC for Health and Social Development of Gauteng in her personal and representative capacity for damages arising from injuries her son sustained before, during and after his birth on 10 May 2003. She alleged medical staff at Edenvale and Johannesburg General Hospitals acted negligently, resulting in her son suffering brain damage and dystonic athetoid quadriplegic cerebral palsy. After pleadings closed and pre-trial conferences, the parties agreed to separate merits from quantum. On 28 April 2015, the MEC offered to compromise liability, undertaking to pay 90% of Slabbert's proved or agreed damages. Slabbert accepted, and on 4 May 2015 this compromise was made an order of court. Pre-trial conferences on quantum occurred on 21 May 2015 and 30 March 2016, with trial scheduled for 18 April 2016. On 13 April 2016, the MEC terminated the State Attorney's mandate and appointed new counsel. On the morning of the quantum trial (18 April 2016), the MEC applied to rescind the consent order, relying on a report by Prof Smuts (a Paediatric Neurologist) which allegedly contained new evidence unavailable before the compromise. The MEC argued that Prof Smuts, who had treated the child, disclosed that hospital staff did not cause the child's condition, and that Slabbert had not disclosed Dr van Rensburg's first report (dated 29 October 2010) which showed a different opinion on the basal ganglia requiring clarification.
The appeal was upheld with costs including costs of two counsel. The order of the High Court was set aside and substituted with an order dismissing the application for rescission of the order made on 4 May 2015 with costs, including costs of two counsel.
A compromise agreement made an order of court may only be rescinded on the grounds of fraud, justus error (where the error vitiated true consent and did not merely relate to motive or the merits of the dispute being compromised), or mistake common to both parties. A unilateral mistake by one party, not flowing from misrepresentation by the other, does not entitle that party to resile from a consent agreement, particularly where the mistake was due to that party's own fault in failing to conduct reasonably necessary investigations before concluding the compromise. A court has no discretion to set aside a consent order recording the terms of a valid settlement agreement where there are no grounds in law for setting aside the underlying compromise agreement. Evidence that was available to a party before concluding a compromise agreement, but which was not properly considered or investigated, does not constitute 'new evidence' capable of grounding rescission. A party cannot rely on ignorance of records under its own control, or failure to consult its own experts or employees, to establish justus error or new evidence justifying rescission of a compromise.
The Court observed that settlement agreements have as their underlying foundation the benefit of orderly and effective administration of justice, and courts cannot allow consent orders to be set aside for reasons not sanctioned by applicable legal principles. The Court noted that although a High Court has inherent discretion, it can never exercise it against recognized principles of substantive law, and the constitutional dispensation does not afford courts carte blanche to ignore substantive law and grant orders merely couched as being in the 'interests of justice.' The Court emphasized that certainty and finality are key elements of justice. The Court also observed that parties to compromise agreements accept an element of risk that their bargain might not be as advantageous as litigation might have been, and this element of risk is inherent in the very concept of compromise. The Court remarked on the salutary principle that 'nothing is more salutary than the settlement of lawsuits,' quoting with approval the maxim that 'a compromise once lawfully struck is very powerfully supported by the law.' Regarding appealability, the Court reiterated the modern flexible and pragmatic approach, focusing on what is appropriate in particular circumstances rather than rigid classification, and on whether an appeal will lead to more expeditious and cost-effective final determination of the dispute.
This case is significant in South African law for clarifying and reaffirming the strict and limited grounds upon which compromise agreements made orders of court can be rescinded. It emphasizes the importance of finality in settlement agreements and consent orders, reinforcing that parties cannot resile from compromises based on unilateral mistakes arising from their own failure to properly investigate claims before settling. The judgment underscores that courts have no discretion to set aside consent orders in the absence of legal grounds to set aside the underlying compromise agreement, even when invoking 'interests of justice.' It provides important guidance on the distinction between new evidence and evidence that was available but not properly considered, and confirms that a party cannot rely on ignorance of its own records or failure to consult available experts. The case also clarifies the test for appealability of rescission orders, holding that substance and effect matter more than form. This judgment promotes legal certainty, encourages proper pre-settlement investigation by parties (particularly state defendants), and protects the integrity of the compromise process as a mechanism for orderly and effective administration of justice.
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