RAF ordered to pay Sunshine Hospital R92m within seven days

The Road Accident Fund (RAF) has been ordered to pay Sunshine Hospital more than R92 million within seven days.

This follows a Supreme Court of Appeal (SCA) application lodged by Newnet Property (Pty) Ltd, trading as Sunshine Hospital, against a judgment handed down in the High Court in Pretoria in June 2024 that dismissed its application to enforce the payment of a civil judgment granted against the RAF.

Sunshine Hospital’s civil claims were dismissed by the high court on the basis of res judicata, a well-established legal principle that where a court has given a final judgment in a matter, any subsequent litigation between the same parties in respect of the same subject matter and based on the same cause of action is not permitted.

SCA judge Fayeeza Kathree-Setiloane, with judges Pieter Meyer and Daisy Molefe concurring, on Tuesday (24 March) upheld the appeal with costs and set aside and replaced the order.

‘Make this payment’

In terms of the SCA order, the RAF is ordered to make payment of the judgments obtained in favour of Newnet/Sunshine Hospital of R92 085 106.36 within seven days from date of service of the order on the fund.

The RAF was also ordered to provide Newnet with an updated ‘Requested Not Yet Paid’ (RNYP) list within seven days and an updated RNYP list to Newnet every 14 days after compliance with this part of the order.

RNYP claims are for invoices that have already been audited and approved by the RAF.

‘Make these payments too’

The fund was also ordered to adjudicate all accounts issued to it by Newnet within 120 days of receipt of these accounts and directed to:

• Make payment to Newnet of R158 890.70 within 30 days of the order (the amount due to it on the May 2023 RNYP list); and
• Thereafter to pay Newnet all amounts due to it as per the current RNYP list within 30 days of the adjudicated account appearing on the RNYP list.

The SCA further directed and ordered RAF acting CEO Radikwena Phora to ensure that the RAF complies with its order.

Patients referred to this hospital by, among others, the RAF …

When Newnet instituted the application in the high court in June 2024, it operated as a hospital and treated patients who were injured in motor vehicle accidents – a large majority of whom were referred or transferred to Sunshine Hospital for treatment by either the RAF or state hospitals that were unable to provide them with the necessary medical care.

In terms of an agreement, Newnet invoiced the RAF for payment of services rendered by it and those provided by its associate medical practitioners.

Newnet experienced payment challenges prior to 2020 but by March 2020 the RAF stopped paying it for services rendered to motor vehicle accident patients.

This led to extensive legal proceedings against the fund.

The RAF has only paid Newnet R336 316 021.13. A balance of R92 085 106.36 remains unpaid and owing to Newnet.

This led to Newnet instituting the June 2024 application, which included applying for former RAF CEO Collins Letsoalo to be directed to ensure the fund complied with the other aspects of its application.

The RAF obstructed payment of Newnet’s long overdue RNYP claims by delaying settlement and also withholding the RNYP list from Newnet.

It has not sent an updated RNYP list to Newnet since May 2023.

According to the last RNYP list furnished by the RAF to Newnet, the fund was indebted to Newnet to the tune of about R380 million, of which R158 890 967.70 remains unpaid.

Judge Kathree-Setiloane said the RAF has become a recalcitrant payer and it has since October 2023 stopped adjudicating and placing Newnet’s claims on the RNYP list.

“This is directed at preventing Newnet from approaching a court for payment of amounts due on the RNYP list,” she said.

Hospital closed, patients transferred, staff retrenched

Kathree-Setiloane said Newnet was compelled in April 2023 to close the hospital due to the RAF’s failure to make payment of arrears due to Newnet, with most patients who were in a critical condition transferred to other hospitals, and staff had to be retrenched.

She said Newnet has since the second quarter of 2024 unsuccessfully attempted to execute against fuel and road accident levy funds purportedly owing to the RAF by the relevant entities – including the South African Revenue Service (Sars), the South African Reserve Bank, National Treasury and the Department of Transport.

Kathree-Setiloane said the relief sought by Newnet is, among others, for the civil enforcement of the judgment debt against the RAF and does not seek to enforce a civil claim for payment of debt by asking for a new judgment or order for payment of the R92 million debt owing but rather seeks to enforce payment of judgment debts and compliance with court orders.

She said the RAF’s deliberate refusal through its officials not to comply with the court orders constituted a breach of its statutory obligations under the RAF Act and its constitutional obligations.

Kathree-Setiloane ruled that Newnet was entitled to seek an order compelling the RAF CEO to ensure the relief sought by Newnet in its application is complied with by the fund.

She said Newnet is also entitled to receive updated RNYP lists from the RAF to enable it to keep track of what payments are due to it, and that the RAF is adjudicating its claims.

She disagreed with a RAF contention the appeal is moot because Newnet has ceased to operate.

She said that in an inquiry from the registrar of the court concerning its status, Newnet informed the SCA in a letter dated 5 February 2026 that it suspended the operation of the hospital in May 2025 but remains the owner of the hospital and it has not been provisionally wound-up and no pending legal process or threat in this regard exists.

Kathree-Setiloane said the shareholders and board of Newnet will seriously consider reopening the hospital upon payment by the RAF of the outstanding indebtedness and agreement being reached with the fund as to the way forward in respect of future business.

“Thus as things stand, the closure of the hospital is not an impediment to Newnet succeeding in the appeal,” she said.

This article was republished from Moneyweb. Read the original here.