Breaking: Road Accident Fund Ordered to Settle Millions Owed to Sunshine Hospital
Viable News Team 
The Supreme Court of Appeal of South Africa has ruled decisively against the Road Accident Fund (RAF), ordering it to pay more than R92 million to Newnet Property (Pty) Ltd t/a Sunshine Hospital and comply with multiple outstanding court orders, in a judgment that strongly criticises the Fund’s persistent failure to honour its legal obligations.
In the case of Newnet Property v Road Accident Fund & Another, the appeal court overturned an earlier ruling of the Gauteng High Court in Pretoria, which had dismissed Newnet’s urgent application on the basis of res judicata—a legal principle preventing the same dispute from being litigated more than once. Writing for the court, Judge Nambitha Kathree-Setiloane, with Judges Raymond Meyer and Mahube Molefe concurring, found that the High Court had erred in its approach.
The dispute stems from long-standing unpaid claims owed by the RAF to Newnet, a private hospital that treated patients injured in motor vehicle accidents. Many of these patients were referred directly by the Fund or treated under circumstances where Newnet assumed the financial risk of non-payment. Over time, the hospital secured several court judgments against the RAF for unpaid services, amounting to more than R403 million. While the Fund made partial payments, a balance of R92 million remained outstanding, prompting further legal action.
The appeal court made it clear that Newnet was not seeking a new judgment for payment, but rather the enforcement of existing court orders. This distinction proved crucial, as the court held that the principle of res judicata did not apply. Instead, the matter concerned the Fund’s failure to comply with binding judgments already granted in Newnet’s favour.
The court painted a troubling picture of the RAF’s conduct, noting that it had effectively adopted a pattern of non-compliance with court orders. Evidence before the court showed that the Fund not only failed to pay its debts but also actively obstructed enforcement efforts. This included frustrating attempts to attach and auction its assets, even going so far as to involve members of the South African Police Service in preventing lawful execution processes.
Particularly significant was the role of the Fund’s leadership. The court directed the acting Chief Executive Officer, Radikwena Phora, to ensure compliance with the orders. The judgment emphasised that, as an organ of state, the RAF has a constitutional duty to respect and implement court decisions. Failure to do so, the court warned, undermines the rule of law and the authority of the judiciary.
Beyond the immediate payment of R92 million within seven days, the court also ordered the RAF to provide updated records of approved but unpaid claims—known as “Requested Not Yet Paid” (RNYP) lists—and to continue updating these every 14 days. It further directed the Fund to process all outstanding accounts within 120 days and settle additional amounts exceeding R158 million within 30 days.
The court rejected the RAF’s arguments that it lacked funds or that the matter was no longer relevant due to the hospital’s operational challenges. It found that these claims were not properly raised in evidence and could not justify continued non-compliance. The judges stressed that financial constraints do not excuse a state entity from obeying court orders.
The judgment also highlighted the real-world consequences of the dispute. Due to prolonged non-payment, Newnet was forced to close its hospital in April 2023, displacing critically ill patients and leading to staff retrenchments. Although it later reopened, the financial strain remained severe, placing both patient care and the hospital’s future at risk.
In a strong reaffirmation of constitutional principles, the court underscored that state institutions must not act in a way that renders court orders meaningless. It warned that persistent disregard for judicial authority threatens the very foundation of South Africa’s legal system.
The appeal was upheld with costs, and the RAF was ordered to pay not only the outstanding amounts but also the legal costs of the proceedings, including those of two counsel.
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