The Supreme Court of Appeal in Avnet South Africa (Pty) Limited v Lesira Manufacturing (Pty) Limited and Another (18/38649) [2019] ZAGPJHC 72 (4 March 2019) had to decide if a settlement agreement may be made an order of court when the agreement was reached without litigation having commenced between the parties.
Settlement agreements usually contain
a standard clause providing that either party to the agreement may approach the
court for an order incorporating the terms of the settlement agreement.
The court found that it does not have
the power to make a settlement agreement an order of court where litigation has
not commenced by the time that the settlement agreement is concluded. The
salient points of the judgment are as follows:
- “The
primary function of the courts is to determine disputes between parties.
The basis upon which a court makes a settlement agreement an order of
court is therefore that there is a dispute between the parties which is
already before the court. Absent the settlement agreement, the court would
have to adjudicate that dispute”.
- “When
the parties resolve the dispute that is before the court, the court may
then (after
satisfying itself that the settlement agreement is a permissible one) make the settlement agreement an order of
court”.
Accordingly, the courts will not make
agreements orders of court merely on consent.
No comments:
Post a Comment