The Road Accident Fund asks the court for an extension to pay its debts


By Zelda Venter October 14, 2020

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Pretoria – The Road Accident Fund (RAF) is in such a difficult financial situation, which has been exacerbated by the Covid-19 pandemic, that it is now asking the court to grant it a 180-day extension to pay its debts.

Its managing director, Collins Letsoalo, said in documents filed with the Gauteng High Court in Pretoria that he knew it was an extraordinary order, but times were tough and it was in the public interest for the RAF to continue its work.

The claim, still pending, was brought after a law firm obtained an enforceable title against the RAF to sell its movable property.

The sheriff had previously removed movable property such as computers and furniture from an RAF office in Tshwane in an attempt to sell the property and pay RAF victims who obtained orders in their favor. But the RAF has now said in its papers that if its possessions were taken, it would not be able to do its job. Thus, he could not pay his dues either.

The RAF is asking the court to make any order it makes in favor of the plaintiffs who wait to be paid on ice for 180 days to give them some breathing space, without their equipment and office supplies being taken away.

Letsoalo said the RAF has not been spared the economic pressure the country has caused by the pandemic.

So, he said, his financial situation was dire and his liabilities continued to grow. If the situation was not handled with a 180-day reprieve, there was a real risk that the RAF would collapse financially or completely. This would prevent the RAF from paying anyone injured in a car accident.

Letsoalo said the RAF recognizes its obligations to the citizens of the country and that this is an extraordinary application. But, he said, if the situation weren’t so bad, he wouldn’t have launched this app.

He said it would only be a temporary measure until the RAF is back on its feet.

While he knew the public can look to court to enforce payment, the remedy was not to seize the RAF property and thus leave it unable to work and face the collapse.

“The losers will be the victims of road accidents,” he said.

The RAF also asked the court to order him to report within 12 months on his financial situation so that it can be decided whether this special provision should remain in place, if granted.

After a law firm tied up RAF furniture and other items last month at its larger branch in Menlyn, the RAF launched a request for the sheriff to return them.

The court had previously issued an interim order in which it said the law firm and the sheriff were to justify by October 28 the reasons why the goods should not be returned permanently. The items have meanwhile been returned to the RAF.

While property has also been withdrawn by law firms from RAF East London and Cape Town offices due to non-payment of claims, similar demands have been made in those jurisdictions.

A request from a large Joburg law firm to liquidate the RAF and another to remove Letsoalo from his post as managing director were struck yesterday.

Judge Ronel Tolmay called the emergency court and said there were no court documents on file.

Maponya Attorneys, who launched the app, said yesterday that she was not ready to proceed.

In this case, the law firm will argue that the fund is insolvent because it owed them R20.6 million in fees.

Letsoalo, in his documents to the contrary, did not deny that the RAF had responsibilities, but said the request was flawed because it was impossible for a court to order the end of the entity.

So, he said, the financial situation of the RAF was irrelevant.

News from Pretoria

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