The RAF asks court for time to pay its debts. Picture: File
The RAF asks court for time to pay its debts. Picture: File

Road Accident Fund asks court for extension to pay debts

By Zelda Venter Time of article published Oct 14, 2020

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Pretoria - The Road Accident Fund (RAF) is in such a dire financial position, that has been exacerbated by the Covid-19 pandemic, that it is now asking for the court to grant it an extension of 180 days to pay its debts.

Its chief executive, Collins Letsoalo, said in papers filed at the Gauteng High Court, Pretoria, that he knew this was an extraordinary order to ask, but times were difficult and it was in the public interest for the RAF to continue with its work.

The application, still to be heard, was prompted after a law firm obtained a writ of execution order against the RAF to sell its movable property.

The sheriff earlier removed movable property such as computers and furniture from one RAF office in Tshwane in a bid to sell the property and to pay RAF victims who had obtained orders in their favour. But the RAF has now said in its papers if its property was taken, it could not do its work. Thus, it also could not pay its dues.

The RAF is asking the court to place any orders it makes in favour of claimants waiting to be paid on ice for 180 days to give it some breathing space, without its equipment and office supplies being taken.

Letsoalo said the RAF had not been spared the economic strain caused to the country by the pandemic.

Thus, he said, it was in a dire financial position and its liabilities continued to grow. If the situation was not managed by a 180-day reprieve, there was a real risk of the RAF collapsing financially or completely. This would cause the RAF to be unable to pay anyone who was injured in a vehicle accident.

Letsoalo said the RAF acknowledged its obligations to the country’s citizens and the fact that this was an extraordinary application. But, he said, if the situation was not so dire, he would not have launched this application.

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

While he was aware that the public may turn to the court to enforce payment, the remedy was not to attach the RAF property and thus leave it unable to work and face collapse.

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

The RAF asked the court also to order it report back within 12 months regarding its financial position so that it could be decided whether this special disposition should remain in place, if granted.

After a law firm attached the RAF furniture and other items last month at its largest branch in Menlyn, the RAF launched an application for the sheriff to return it.

The court earlier granted an interim order in which it said the law firm and the sheriff must state reasons by October 28 why the goods should not be permanently returned. The items have in the meantime been returned to the RAF.

While goods were also removed by law firms at the RAF East London and Cape Town offices due to non-payment of claims, similar applications were issued in those jurisdictions.

The application by a leading Joburg law firm to have the RAF liquidated and another for Letsoalo to be removed as chief executive were yesterday removed from the roll.

Judge Ronel Tolmay called the matter in the urgent court and said there were no court papers in the file.

Maponya Attorneys, which launched the application, said yesterday it was not ready to proceed.

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

Letsoalo, in his opposing papers, did not deny the RAF had liabilities, but said the application was defective as it was impossible for a court to order the end of the entity.

Thus, he said, the financial position of the RAF was irrelevant.

Pretoria News

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