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[2016] ZASCA 134
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Mbele v Road Accident Fund (799/15) [2016] ZASCA 134; [2016] 4 All SA 752 (SCA); 2017 (2) SA 34 (SCA) (29 September 2016)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 799/15
In
the matter between:
LUVUYO
NICOLAAS MBELE
APPELLANT
and
ROAD
ACCIDENT FUND
RESPONDENT
Neutral
citation:
Mbele
v Road Accident Fund
(799/15)
[2016] ZASCA 134
(29 September 2016)
Coram:
Shongwe, Saldulker,
Swain and Zondi JJA and Dlodlo AJA
Heard:
26 August 2016
Delivered:
29 September
2016
Summary:
Road Accident Fund
Act 56 of 1996
– a claim for future medical expenses based on
an undertaking in terms of
s 17(4)
(a)
(i)
of the Act in respect of an action for damages arising from a motor
vehicle accident lodged in terms of
s 17(1)
of the Act is not subject
to prescription under the
Prescription Act 68 of 1969
, instead,
s
23(3)
of the
Road Accident Fund Act as
it read prior to its
amendment in 2008 is applicable.
ORDER
On appeal from:
Western
Cape Division of the High Court, Cape Town (Savage J sitting as court
of first instance).
1 The appeal is upheld with costs.
2 The order of the court a quo is set aside and
substituted with the following:
‘
The special plea of
prescription is dismissed with costs.’
JUDGMENT
Shongwe
JA (Saldulker, Swain, Zondi JJA and Dlodlo AJA concurring)
[1]
This appeal concerns the question whether an undertaking that was
made by the respondent, the Road Accident Fund (the Fund),
in terms
of s 17 (4)
(a)
(i)
of the Road Accident Fund Act 56 of 1996 (the Act) for future medical
and hospital expenses, has prescribed. This issue depends
for its
resolution on whether the relevant prescription legislative regime
applicable is s 23(3) of the Act
or
s 11
(d)
of the Prescription Act 68 of 1969 (the
Prescription Act). Related
to
this issue is the question of what the effect of the amendment of s
23(3) of the Act is on the respondent’s plea of prescription.
[2]
On 7 July 2006 the appellant was injured in a motor vehicle
collision. He instituted action proceedings against the Fund in
terms
of s 17(1) and in accordance with the procedure set out in s 24 of
the Act. The summons in that action was lodged timeously
in 2007 and
the claim was subsequently settled. The settlement agreement was made
an order of court on 21 April 2009 and included,
inter alia, payment
of a lump sum in excess of R2 million for general damages and the
costs of suit. Prior to the conclusion of
the settlement agreement
the Fund made an undertaking, on 23 October 2008, in terms of s
17(4)
(a)
(i)
of the Act to compensate the appellant for the costs of future
medical and hospital expenses, after the costs have been incurred
and
upon proof thereof (the undertaking).
[3]
In the light of the undertaking the appellant, around October 2010,
sent a letter of demand to the Fund and requested payment
in respect
of hospital and medical expenses, and presented proof of the expenses
he allegedly incurred. It appears that this letter
was received by
the Fund in November 2010, but no payment was forthcoming.
[4]
Subsequently, on 10 April 2013, the appellant served a summons on the
Fund claiming, in terms of the undertaking, the sum of
R94 063.28.
The appellant alleged that this sum was for medical and hospital
expenses and that he had furnished the Fund with
the proof of these
expenses, but that the Fund failed to pay. In opposing the action the
Fund filed a special plea that the appellant’s
claim had
prescribed within a period of three years from the date that the
abovementioned expenses were allegedly incurred. According
to the
appellant, these expenses were incurred in or about June 2009.
Therefore, the Fund contended, the claim prescribed in or
before July
2012.
[5]
In the court a quo, the parties agreed on a stated case upon which
the Fund’s special plea of prescription was to be argued.
In
terms of the stated case, it was uncontested that the undertaking had
been issued by the Fund on 28 October 2008, and that it
was for
payment of future hospital and medical treatment incurred, on proof
thereof. It was also uncontested that the appellant
had not been paid
in terms of the undertaking. The Fund however contended that the
undertaking was contractual and not purely statutory
in nature; that
it amounted to a debt and that its obligation to pay arose once the
appellant incurred the debt and had furnished
proof. Thus, the debt
had prescribed in terms of
s 11
(d)
of the
Prescription Act which
provides that the periods of
prescription of debts shall, save where an Act of Parliament provides
otherwise, be three years in
respect of any other debt.
[6]
On the other hand the appellant contended that there was no
prescription applicable as regards the undertaking, and that the
Fund
was obliged to compensate him in terms of his claim regardless of the
date of treatment or service because his claim was not
susceptible to
prescription, due to the fact that it formed part of a unitary claim
instituted and prosecuted in terms of s 17(1)
of the Act. In other
words when the settlement agreement was reached, which included the
undertaking, the Fund admitted liability
for future medical and
hospital expenses incurred as part of its liability for all the heads
of damages claimed.
[7]
The matter was eventually set down for the hearing of the special
plea. The court’s view was that the undertaking was
a
contractual obligation which was separate from the s 17(1) claim
instituted by the appellant in 2006. It equated the undertaking
to a
discrete and new agreement and accordingly found that the
Prescription Act was
applicable. This meant, the court continued,
that since the appellant had failed to claim within three years from
the date upon
which the debt became due, his right to claim had
prescribed as provided in
s 11
(d)
of the
Prescription Act. Accordingly
, it upheld the Fund’s
plea with costs. The current appeal is against this order upholding
the special plea and is with leave
of the court a quo.
[8]
Before us, counsel for the appellant persisted with his submission
that any claim lodged in terms of the undertaking does not
and cannot
attract prescription. He argued further that the undertaking does not
create a new and independent contractual obligation
or a distinct
claim based on a different cause of action. His view was that for
purposes of prescription, the provisions of the
Act as it appeared
prior to its amendment was applicable.
[9]
It is indeed a startling proposition by the appellant that claims in
terms of an undertaking in terms of the Act do not prescribe
at all,
and counsel was unable to provide any authorities to support such a
proposition. I do not agree with his contention and
I am of the view
that it has no merit. The law encourages finality in litigation
therefore no claim can exist indefinitely. (See
Road
Accident Fund & another v Mdeyide
[2012] ZACC 18
;
2011 (2) SA 26
(CC) para 8.)
[10]
On its part, the Fund argued that the undertaking constituted a new
cause of action which is susceptible to prescription. Counsel
for the
Fund submitted that the undertaking is a stand-alone agreement which
creates a new contractual foundation and which exists
independently
of the claim in terms of s 17(1) of the Act. As regards prescription,
the Fund submitted that s 23(3) of the Act
prior to its amendment did
not specify undertakings and was limited to s 17(1) claims and
consequently, the applicable prescription
period was provided for in
s 11
(d)
of the
Prescription Act. Counsel
also submitted that
the nature of the claim transforms into something else, which he was
however unable to describe. He argued
that the introduction of s
17(4)
(a)
of the Act was a deviation from the common law rule
of delictual claims. It is indeed so and as Trollip JA remarked in
Marine & Trade Insurance Co Ltd v Katz NO
1979 (4) SA 961
(A) at 970C-D:
‘
The
purpose of the provision [Section 21 (IC)
(a)
]
was to innovate a departure from the common law.’
Section
21(IC)
(a)
of the Compulsory Motor Vehicle Insurance Act 56 of 1972 is the
predecessor of s 17(4)
(a)
of the Act.
[11]
Counsel for the Fund referred us to
Stupel
& Berman Inc v Rodel Financial Services (Pty) Ltd
[2015] ZASCA 1
;
2015 (3) SA 36
(SCA) para 15 and to
Lieberman
v Santam Ltd
2000
(4) SA 321
(SCA) in support of the proposition that in an agreement
couched as an undertaking, the undertaking creates a new contractual
foundation
for a valid and enforceable obligation to pay which exists
independently of any previous obligation under the Act. In
Stupel
& Berman
the
cause of action related to a transaction of purchase and sale which
involved the transfer of immovable property. This case
had nothing to
do with a collision regulated by the Act and is distinguishable from
the present case, because the undertaking referred
to there was
indeed a stand-alone agreement between
Rodel
,
on the one hand, and
Stupel
& Berman
on the
other hand, from which certain obligations arose for
Stupel
& Berman
.
Stupel & Berman
acted as the conveyancing attorneys.
[12]
The
Lieberman
case is also distinguishable from the present
case. In para 12 Vivier JA observed that:
‘
It
is sufficient to say that the agreement provided the appellant with a
contractual basis upon which to found a cause of action
for payment
which he was free to invoke if he so chose’.
In
that case the cause of action was not the collision itself
but the action was based on an
agreement entered into by the parties whereby the fund admitted
liability and agreed to pay 50 per
cent of such losses and damages as
might be agreed between the parties or ordered by the court. It was
not an undertaking in terms
of s 17(4)
(a)
of the Act. The parties had also concluded a verbal agreement in
terms whereof the Fund had undertaken not to plead prescription
before a particular date. All in all, both cases do not deal with the
provisions of s 17(1) and 17(4)
(a)
of the Act. In
Nonkwali
v Road Accident Fund
[2008] ZASCA 3
;
2009 (4) SA 333
(SCA) para 8 Maya JA (as she then
was) correctly observed that there was a plethora of authorities to
the effect that a claimant
seeking compensation for damages sustained
as a result of wrongful and negligent driving under the Act had ‘…
but
a single, indivisible cause of action and that the various items
constituting the claim were thus not separate claims or separate
causes of action.’ She referred with approval to what Corbett
JA said in
Evins v
Shield Insurance Co Ltd
1980 (2) SA 814
(A) at 836D-E. (See also
Evins
at 837A-C).
[13]
It is necessary, before I proceed to deal with the issues raised in
paragraph 1 above, to set out the relevant legislative
provisions of
the Act dealing with the prescription of undertakings both prior to
and after the Act was amended in 2008. Before
its amendment s 23 of
the Act read as follows:
‘
(3)
Notwithstanding subsection (1), no claim which has been lodged in
terms of s 24 shall prescribe before the expiring of a period
of five
years from the date on which the cause of action arose.’
This
subsection was amended with effect from 1 August 2008, by
s 10
of the
Road Accident Fund Amendment Act 19 of 2005
, and currently reads as
follows:
‘
(3)
Notwithstanding subsection (1), no claim which has been lodged in
terms of
section 17
(4) (a) or
24
shall prescribe before the expiry
of a period of five years from the date on which the cause of action
arose.’
The
only difference between the unamended version and the amended one is
the insertion of
s 17(4)
(a).
This insertion, in
my view, buttresses the proposition that the legislative regime that
determines prescription in claims lodged
in terms of
s 24
read with s
17(1) of the Act shall be the
Road Accident Fund Act and
not the
Prescription Act.
[14
]
For the present purposes it is clear that the
Prescription Act is
not
relevant. It is also not clear from the court a quo’s
judgment why it saw fit to apply it. My understanding is
that as part
of the settlement, the Fund undertook to compensate the appellant for
future medical and hospital expenses, after
such expenses have been
incurred and proved. Had there been no collision which resulted in
the injuries to the appellant and the
admission of liability by the
Fund, the undertaking would not have come into existence. Thus the
claim filed in terms of
s 17(1)
read with s 24 of the Act, which
claim included future medical and hospital expenses is the basis upon
which the undertaking in
terms of s 17(4)
(a)
(i)
of the Act was issued. It cannot be that this claim is a separate
claim unrelated to a claim in terms of s 17(1) of the Act.
Accordingly, it is ineluctable that the period of prescription of a
claim under s 17(4)
(a)
the Act can only be determined in terms of s 23 of the Act and not in
terms of the
Prescription Act. The
principles governing the
interpretation of statutes must apply as explained in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012] ZASCA; 2012
(4) SA 593 para 18 that interpretation is a
process of attributing meaning to the words used in a document read
in context and
having regard to the purpose of the provision. (See
also
Bothma-Batho
Transport (EDMS) Bpk v S Bothma & Seun Transport
(EDMS) Bpk
[2013] ZASCA 176
;
2014 (2) SA 494
para 10.)
[15]
What I need to emphasize is that future medical expenses in relation
to a claim in terms of s 17(1) of the Act cannot constitute
a
separate and distinguishable claim but it is an integral and
indivisible part of a third party claim for damages. (See
Evins
v Shield Insurance Co Ltd
at 836A – 837D;
Nokwali
v Road Accident Fund
[2008] ZASCA 3
;
2009 (4) SA 333
(SCA) paras 8 – 9.
Klaas
v Union and South West Africa Insurance Co Ltd
1981 (4) SA 562
(A) at 577D-H. H B Klopper in his article
‘Prescription of Obligations Arising from Undertaking Issued by
the Road Accident
Fund in Pursuance of
Section 17(4)
(a)
of the
Road
Accident Fund Act 56 of 1996
’,
2014 (77)
THRHR
485
at 488 observes that ‘[a]n undertaking issued in terms of
the strict wording of
s 17(4)
(a)
also does not create a contractual relationship between the claimant
and the Fund’. He opines that it is only rights contractually
created that are susceptible to prescription as being a debt, and
cites
s 10
of the
Prescription Act and
Evins
at 838. I agree with the learned author. It is clear from the
above discussion that s 17(4)
(a)
of the Act does not create any new and independent contractual
obligation or a debt independent of s 17(1).
[16]
Furthermore the Constitutional Court has put paid to the question of
which legislative regime is applicable in these circumstances.
In
Road Accident Fund & another v Mdeyide
para 50, Van der
Westhuizen J observed that:
‘
There
is therefore a clear reason for the difference between the
Prescription Act and
the RAF Act. The
Prescription Act regulates
the
prescription of claims in general, and the RAF Act is tailored for
the specific area it deals with, namely claims for compensation
against the Fund for those injured in road accidents. The legislature
enacted the RAF Act – and included provisions dealing
with
prescription in it – for the very reason that the
Prescription
Act was
not regarded as appropriate for this area. Looking for
consistency in this context is a quest bound to fail.’
[17]
The Act was established, in my view, to give the greatest possible
protection and to promote the socio-economic rights of victims
of
motor vehicle accidents. It must be construed at all times to give
access to courts and justice rather than to limit access
to justice.
(See
Law Society of
South Africa & another v Minister for Transport & another
[2010] ZACC 25
;
2011 (1) SA 400
(CC) para 40;
Mvumvu
& others v Minister of Transport & another
[2011] ZACC 1
;
2011 (2) SA 473
(CC) at 479 para 20;
Englebrecht
v Road Accident Fund & another
[2007] ZACC 1
;
2007 (6) SA 96
(CC) para 23 and
Aetna
Insurance Co v Minister of Justice
1960 (3) SA 273
(A) at 285E-F.)
[18] In
summary, in my view, s 17(1) to (4), 23(1) to (3) and 24 of the Act,
must be read together.
The
reference in s 23(3) of the Act (before its amendment) to a ‘claim
which has been lodged in terms of s 24’ must
include a claim
for the payment of future medical expenses, A claim in terms of s
17(1) read with s 17(4) of the Act ‘includes
a claim for the
costs of the future accommodation of any person in a hospital or
nursing home or treatment of or rendering of a
service or supplying
of goods. . .’. This claim is lodged in terms of s24,
accompanied by the requisite medical report. The
Fund is thereafter
entitled to furnish an undertaking to cover the payment of future
medical expenses. The third party cannot
however claim or
insist that the Fund furnish an undertaking, (see
Marine
& Trade supra
at
970H),
and consequently
such a ‘claim’ cannot be ‘lodged’ for the
purposes of s 23(3). The furnishing of an undertaking
does not alter
the fact that the claim for future medical expenses is and remains
one in terms of s 17(1), which is lodged in terms
of s 24. It does,
however, affect ‘the date upon which the cause of action arose’
for the purposes of s 23(3) of the
Act, in respect of individual
claims which are covered by the undertaking. This ‘date’
must be the date when a complete
cause of action arises, entitling
the third party to institute action for recovery of the claims
covered by the undertaking.
[19] A
complete cause of action in respect of future medical claims covered
by an undertaking must arise when the costs are incurred.
In terms of
s 17(4)
(a)
(i) of the Act, the Fund is only obliged to
compensate the third party in respect of the costs ‘after the
costs have been
incurred and on proof thereof’. In addition,
the Fund is only obliged to compensate the third party for the
reasonable costs
of the defined medical expenses, which may not
necessarily be their actual cost. (See
Marine & Trade supra
at 972). If the Fund declines to pay the medical costs claimed, the
third party will have to institute action within five years
of the
complete cause of action arising, being the date when the costs were
incurred. A complete cause of action cannot arise as
at the time of
the accident, in respect of future medical expenses covered by an
undertaking, as these costs have not yet been
incurred. If this were
not so, the recovery of any medical expenses incurred more than five
years after the accident would be precluded.
[20] Although
the claim for future medical expenses forms an integral and
indivisible part of a third party claim for damages, the
effect of an
election by the Fund to furnish an undertaking in terms of s 17(4)
(a)
of the Act, is that payment of these costs only falls due ‘after
the costs have been incurred’. This does not mean
that a
separate and distinct cause of action is created in respect of future
medical claims covered by the terms of an undertaking,
but that the
obligation on the part of the Fund to make payment of these damages
only arises after the medical costs have been
incurred and the third
party has thereby acquired a complete cause of action.
[21] The
subsequent amendment of s 23(3) of the Act to include a reference to
s 17(4)
(a)
of the Act confirms and clarifies the position,
that prescription in respect of claims for payment of medical
expenses, covered
by the terms of an undertaking, only intervenes
‘five years from the date on which the cause of action arose’.
The
reference in s 23(3) to a ‘claim which has been lodged in
terms of s 17(4)
(a)
. . .’ can only refer to a claim for
payment of medical expenses covered by the requisite undertaking and
not to the undertaking
itself. As pointed out, this is because a
third party cannot claim or insist that the Fund furnish an
undertaking and consequently
such a claim cannot be ‘lodged’
for the purposes of s 23(3).
[22] In this
case the appellant’s hospital and medical expenses were
incurred in June 2009 and summons was issued on 9 April
2013 to
recover these expenses. Summons was accordingly issued within the
period of five years as provided for in s 23(3) of the
Act and the
claims of the appellant had not prescribed.
[23]
The following order is made:
1
The appeal is upheld with costs.
2
The order of the court a quo is set aside and substituted with the
following:
‘
The
special plea of prescription is dismissed with costs.’
__________________
J B Z Shongwe
Judge of Appeal
Appearances
For
the Appellant: E Lombard
Instructed by:
A Batchelor & Associates, Cape
Town;
McIntyre & Van der Post,
Bloemfontein.
For
the Respondent: A Bhoopchand
Instructed by:
Mayats Attorneys, Cape Town;
Symington & De Kok, Bloemfontein.