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[2014] ZASCA 106
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Road Accident Fund v Coughlan (702/13) [2014] ZASCA 106; 2014 (6) SA 376 (SCA) (3 September 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
No: 702/2013
Reportable
In
the matter between:
The
Road Accident
Fund
...................................................................................................
APPELLANT
and
Wayne
Coughlan
NO
......................................................................................................
RESPONDENT
Neutral
Citation:
RAF v Coughlan
702/13
[2014] ZASCA 106
(3 September 2014)
Coram:
Lewis, Theron, Pillay, Mbha JJA and
Mathopo AJA
Heard:
15 August 2014
Delivered:
3 September 2014
Summary:
Foster child grants made to the dependants of a
deceased killed in a collision covered by the
Road Accident Fund Act
56 of 1996
should, as a rule, be deducted from any award of damages
for loss of support made by the Road Accident Fund.
ORDER
On
appeal from:
Western Cape High Court,
Cape Town (Henney J sitting as court of first instance):
The
appeal is upheld and the order of the high court is set aside and
replaced with:
‘
The
foster child grants are to be taken into account in assessing the
damages to be awarded for loss of support, and, since these
exceed
the amount agreed to be payable as damages by the defendant, no order
as to payment is made.’
JUDGMENT
Lewis
JA (Theron, Pillay and Mbha JJA and Mathopo AJA concurring)
[1]
This appeal concerns the question whether foster child grants made to
the foster parent of children whose mother was killed
by the driver
of a motor car, and for which the Road Accident Fund (RAF), the
appellant, admitted liability, are deductible from
damages awarded
for loss of support to the children. The Western Cape High Court
(Henney J) held that the fact of the foster child
grants was ‘res
inter alios acta’ and that the dependent children were entitled
to the full amount of the damages suffered
as loss of support of
their mother. The quantum of the award to be paid was agreed by the
curator ad litem for the children, Mr
Wayne Coughlan, and the RAF.
The amount already paid by the State as foster child grants was also
agreed. (It exceeded the amount
agreed to be payable as damages.) The
appeal lies with the high court’s leave.
[2]
The question was put to the high court by way of a stated case, and
the only evidence led was that of the foster mother, who
is the
biological grandmother of the children, all of whom have now reached
the age of majority. The facts are not contested and
are, in summary,
these. The children’s father died in August 2000. In June 2002,
their mother, the deceased, was killed on
the road when, as a
pedestrian, she was knocked over by a driver whom the RAF admitted
was 100 per cent to blame for the collision
such that it was liable
for damages suffered by the children for loss of support.
[3]
Prior to her death, the mother had placed the children in the care of
her parents: for a brief time she was imprisoned and the
children
lived with their grandparents in that time. Even on her release they
remained with the grandparents as their mother was
unable to look
after them. But when she did find work, as a builder, she assisted
her parents financially so that they in turn
could support their
grandchildren.
[4]
After the death of her daughter the grandmother applied to the
Children’s Court to be appointed as a foster parent to
her
grandchildren and was so appointed in August 2002 in terms of the
Child Care Act 74 of 1983. As a result she was entitled to
receive
foster child grants in terms of the Social Assistance Act 59 of 1992,
replaced by the
Social Assistance Act 13 of 2004
.
[5]
In the stated case put to the high court the RAF and the curator
agreed that the quantum of damages to which the children were
collectively entitled for loss of the support of their mother was
some R112 942. The amount that the grandmother had been paid
as
foster child grants at the time of the action was R146 790. The RAF
contended that the children were not entitled to compensation
for
loss of support as the foster child grants had been paid as a result
of the death of their mother and that they had therefore
already been
compensated for loss of support. But for the collision and her
ensuing death, for which the RAF admitted liability
for damages, the
grandmother would not have received grants for the children. It
argued that payments of foster child grants and
of damages for loss
of support amounted to double compensation for the death of the
mother.
[6]
The curator contended, on the other hand, that the payments of the
grants were acts of gratuity by the State: they were paid
to people
who elected to become foster parents, and were not compensation for
losses sustained by accident victims. The source
of the grants, the
National Treasury, was not the same as the source of damages for loss
of support, the RAF, although admittedly
that too is funded by the
State.
[7]
The question put to the high court for decision was: ‘Whether
or not the foster child grants . . . fall to be deducted
from the
amount agreed to in respect of the loss of support . . .’.
As I have said, Henney J held that the amount should
not be deducted,
the payments being res inter alios acta.
[8]
On appeal, the RAF argued that the high court had incorrectly relied
on
Makhuvela
v Road Accident Fund
[1]
in which Malan J had found that foster child grants, made under the
Social Assistance Act of 2004
, were paid not to the children of the
deceased who was killed in a collision, but to the foster parents,
and were not deductible
from the damages awarded by a court for loss
of support. The RAF placed reliance instead on a judgment of this
court:
The
Road Accident Fund v N F Timis.
[2]
That case was concerned with social assistance grants, and in finding
that these should be deducted from the damages awarded for
loss of
support, this court distinguished
Makhuvela
on the basis that the nature of the grants might be different and
that the court did not have to determine whether
Makhuvela
was correctly decided.
[9]
In order to determine whether the grants made by the State should be
deducted from the award of damages for loss of support
it is
necessary first to see whether there is any real distinction between
the social assistance grants made in
Timis
and the foster
child grants made in this case and in
Makhuvela
. I shall then
turn to the general principles relating to the deduction of amounts
paid to dependants by reason of the death of
a breadwinner from
awards made for loss of support against the RAF or its predecessor
funds.
[10]
The
Social Assistance Act 13 of 2004
, which came into operation on 1
April 2006, seeks to give effect to the Constitution’s
injunction that everyone has the right
to have access to social
security, ‘including, if they are unable to support themselves
and their dependants, appropriate
social assistance’.
[3]
The grants made in
Timis
were made in terms of s 6. This court held
[4]
that the purpose of such grants is to supplement the income of
indigent families – those who do not have the means to support
themselves and to provide for a child. An applicant ‘primary
care giver’ qualifies for a grant if he or she has no
income or
the income is below a particular threshold.
[5]
[11]
In
Timis
the mother of two children applied for a child
support grant under the former
Social Assistance Act (59
of 1992)
after the death of their father, the sole breadwinner in the family,
in a motor collision. She subsequently instituted
action against the
RAF for damages for loss of support. The RAF conceded liability on
the merits but argued that the grants already
paid – some R14
690 – should be deducted from the award of damages. The trial
court had held that the grants had not
been received as a consequence
of the father’s death, and the grant should not be deducted.
But this court held on appeal
that the grants had been made as a
direct consequence of the death of the father, the only income earner
in the family, and were
directly linked to his death.
[12]
This court upheld the RAF’s appeal against the decision,
finding that the amount of the grants should be deducted from
the
damages award. Mhlanthla JA said:
[6]
‘
[T]he
State assumed responsibility for the support of the children as a
result of the breadwinner’s death. The moneys paid
out in terms
of the
Road Accident Fund Act and
the
Social Assistance Act are
funded by the public through two State organs. Not to deduct the
child grant would amount to double recovery by the respondent
[the
mother] at the expense of the taxpayer and this is incapable of
justification. In my view it was not the intention of the
Legislature
to compensate the dependants twice.’
[13]
It is trite that dependants are not permitted to get double
compensation. The principle was put thus in
Zysset
& others v Santam Ltd
:
[7]
(I quote extensively from the judgment of Scott J because he dealt
not only with the principles but also summarized usefully the
various
authorities on the subject).
‘
The
modern South African delictual action for damages arising from bodily
injury negligently caused is compensatory and not penal.
As far as
the plaintiff's patrimonial loss is concerned, the liability of the
defendant is no more than to make good the difference
between the
value of the plaintiff's estate after the commission of the delict
and the value it would have had if the delict
had not been
committed. See
Dippenaar v Shield
Insurance Co Ltd
1979 (2) SA 904
(A)
at 917B. Similarly, and notwithstanding the
problem of placing a monetary value on a non-patrimonial loss, the
object in awarding
general damages for pain and suffering and loss of
amenities of life is to compensate the plaintiff for his loss. It is
not uncommon,
however, for a plaintiff by reason of his injuries
to receive from a third party some monetary or compensatory benefit
to
which he would not otherwise have been entitled. Logically and
because of the compensatory nature of the action, any advantage or
benefit by which the plaintiff's loss is reduced should result in a
corresponding reduction in the damages awarded to him.
Failure
to deduct such a benefit would result in the plaintiff
recovering double compensation which, of course, is inconsistent
with
the fundamental nature of the action.
[My emphasis.]
Notwithstanding
the aforegoing, it is well established in our law that certain
benefits which a plaintiff may receive are to be
left out of account
as being completely collateral. The classic examples are
(a)
benefits
received by the plaintiff under ordinary contracts of insurance for
which he has paid the premiums and
(b)
moneys and other benefits received by a plaintiff from the
benevolence of third parties motivated by sympathy. It is said that
the law baulks at allowing the wrongdoer to benefit from the
plaintiff's own prudence in insuring himself or from a third party's
benevolence or compassion in coming to the assistance of
the plaintiff. Nor, it would seem, are these the only benefits
which
are to be treated as
res
inter alios acta
.
In
Mutual
and Federal Insurance Co Ltd v Swanepoel
1988
(2) SA 1
(A)
it
was held, for example, that a military pension which was in the
nature of a
solatium
for the plaintiff's non-patrimonial loss was not to be deducted.
Nonetheless, as pointed out by Lord Bridge in
Hodgson
v Trapp and Another
[1988] 3 All ER 870
(HL) at 874
a
,
the benefits which have to be left out of account, “though not
always precisely defined and delineated”, are exceptions
to the
fundamental rule and “are only to be admitted on grounds which
clearly justify their treatment as such”.
In
practice, a plaintiff who seeks to have a benefit which he has
received from a third party left out of account attempts to
categorise
the benefit as falling within the ambit of, or as being
analogous to, one or other of the two classic exceptions referred to
above.
The present case was no exception. In the
Dippenaar
case
supra
the approach was slightly different. In that case
certain pension benefits which were payable in terms of the
plaintiff's
contract of employment were held to be deductible. The
reason, in short, was that when a plaintiff seeks to establish his
loss
of earning capacity on the basis of a contract of employment,
regard must be had to the contract as a whole and any benefits
flowing
from the contract, such as pension benefits, cannot simply
be ignored. In the present case, counsel on both sides sought to
analyse the benefits received by the plaintiffs and to compare them
with the benefits received in the
Dippenaar
case. Counsel on
the one side emphasized the differences, while counsel on the other
emphasized the similarities.
It
is doubtful whether the distinction between a benefit which is
deductible and one which is not can be justified on the basis
of a
single jurisprudential principle.
[My emphasis.] In the past
the distinction has been determined by adopting essentially a
casuistic approach and it is this that
has resulted in a number of
apparently conflicting decisions. Professor Boberg in his
Law of
Delict
vol 1 at 479 explains the difficulty thus:
'(W)here
the rule itself is without logical foundation, it cannot be expected
of logic to circumscribe its ambit.'
But,
whatever the true rationale may be, if indeed there is one, it would
seem clear that the inquiry must inevitably involve to
some extent,
at least, considerations of public policy, reasonableness and justice
. . . . This in turn must necessarily involve,
I think, a weighing up
of mainly two conflicting considerations in the light of what is
considered to be fair and just in all the
circumstances of the case.
The one is that a plaintiff should not receive double compensation.
The other is that the wrongdoer
or his insurer ought not to be
relieved of liability on account of some fortuitous event such as the
generosity of a third
party.’
[14]
This court followed the principles set out in
Zysset
in
Timis
,
quoting much of the passage above. So did the high court in
Makhuvela.
Yet
different results were reached.
Makhuvela
was distinguished by the court in
Timis
on the basis that a foster child grant ‘has its own
dimensions’.
[8]
It left open the question whether
Makhuvela
was correctly decided.
[15]
In this appeal, the RAF argued that the court in
Makhuvela
had erred. There Malan J placed great emphasis on the rights of
children to protection and support, and the pivotal role that the
Constitution plays in the protection of children’s rights. That
case was also concerned with the deductibility of a foster
child
grant from an award of damages for loss of support arising from the
negligent killing of a father by a driver. Malan J said:
[9]
‘
The
purpose of the Act [the
Social Assistance Act of 2004
] is . . . not
only to secure the support of foster children and other groups of
people, but also to ensure equality and the realization
of the rights
of the child under the Constitution.’
He
distinguished such a grant from the kinds of benefits or payments
that have been deducted from awards for loss of support (like
those
set out in the passage from
Zysset
)
on the basis that foster child grants are made not to the dependant
who has lost support but to the foster parent. ‘It is
given to
the foster parent to enable him or her to comply with his or her
obligations to the child’. The learned judge did
point out,
however, that there were several safeguards put in place by
legislation to ensure that a foster child grant is used
for the
benefit of the child and is payable only for so long as the foster
child is cared for by the foster parent.
[10]
[16]
The RAF contended that the distinction between social assistance
grants, as awarded to the mother of the children whose father
had
been killed, and foster child grants as awarded to the foster parent
of the children in this case, is a false one. In both
cases the
grants are made to enable the support of a child. They are granted to
parents or caregivers of children in need of care.
Section 8
of the
Social Assistance Act (2004
) states that a ‘foster parent is .
. . eligible for a foster child grant for as long as that child needs
such care’.
Such grants must thus be used for the benefit of
the foster child. Moreover, in terms of the Children’s Care Act
74 of 1983,
a foster parent has a duty to maintain a child placed in
his or her care (s 41(1) and (2)).
[17]
Thus, argued the RAF, the foster parent does not have unfettered
powers to use the foster child grant: it must be used for
the benefit
and maintenance of the child. And although the foster child does not
have a claim to the grant himself or herself,
if the foster parent
abuses the grant the Social Services has a discretion, in terms of
s
19
of the
Social Assistance Act, to
substitute another foster parent.
[18]
In my view, there is no difference in substance between child support
grants and foster child grants. Counsel for the curator
accepted that
there was no difference in principle between the two types of grant,
but argued that in this case, the children had
been in the care of
their grandparents before their mother died. Although she had made
some contribution to the children’s
support, the grandparents
may have needed additional funds for their support before she died.
That may well have been so. But no
evidence was led in this regard,
and the fact is that the grandmother applied to be appointed as a
foster parent, and for foster
child grants, only after the death of
her daughter. I therefore accept the argument of the RAF that, but
for the death of the mother
in a collision for which the RAF accepted
liability, the foster parent would not have claimed foster child
grants.
[19]
The curator also argued that the circumstances underlying the need
for foster child grants in this matter arose not because
of the death
of the children’s mother, but because the family was indigent.
The foster parent could not support the children.
The purpose of
grants made under the
Social Assistance Act is
to provide a basic
need for people who are impoverished. But as I have said, there was
no evidence to support the proposition that
the foster parent would
have applied for grants had the mother of the children not died. On
the contrary, the evidence showed that
the mother had contributed to
the financial support of her children before she was killed.
[20]
The RAF raised one further argument as to why double compensation
should not be given to the children. The funding of the RAF
and that
given under the
Social Assistance Act has
the same source: the
National Treasury. That is correct but in my view it makes no
difference. In other cases, double compensation
has been precluded
where the sources of the compensation are different. In
Lambrakis
v Santam Ltd
[11]
this court held that where the deceased’s estate devolved on
the children deprived of support by the death of their father
in a
road accident, and the estate maintained them, no action for loss of
support lay against the insurer of the negligent driver.
No financial
loss had in fact been suffered by the dependants and their action
against the insurer had to fail. The court said
in that case that the
dependants should not profit from the wrongdoing of the defendant,
relying on
Indrani
& another v African Guarantee & Indemnity Co Ltd
,
[12]
and on a series of articles written by Professor P Q R Boberg.
[13]
Boberg’s work had shown that our courts have worked on a
casuistic basis in determining whether other sources of support
should be deducted from an award of damages for loss of support,
applying a principle of losses and gains, without any clear
jurisprudential
principle – a view endorsed by Scott J in
Zysset
in
the passage quoted above.
[21]
In my view the high court erred in finding that the children were
entitled to damages for loss of support from the RAF. The
foster
child grants served the very purpose which an award of damages would
do: providing the children with the financial support
lost as a
result of the death of their mother. That means that the court in
Makhuvela
also erred, the necessary implication of the
decision in
Timis
by which we are bound.
[22]
It is important to stress that this finding does not mean that there
is any general principle precluding an award of damages
for loss of
support where dependants have had the benefit of social support
grants. In this situation, as in most, the facts should
determine
whether there has been an actual financial loss caused by the death
of a deceased. Where there is evidence that social
assistance grants
are warranted, and that double compensation will not ensue, an award
of damages may well be appropriate. As was
said in
Zysset
,
the enquiry must involve considerations of public policy,
reasonableness and justice. A court faced with the enquiry must take
into account two conflicting policy considerations: that a dependant
should not receive double compensation, on the one hand, and
that a
wrongdoer should not be relieved of liability because of fortuitous
benefits received by the dependant.
[14]
[23]
It should be noted, for the sake of completeness, that certain
benefits received by a dependant are not deductible from an
award of
damages by virtue of the provisions of the
Assessment of Damages Act
9 of 1969
: these include insurance moneys, pensions or benefits (all
as defined in that Act) paid as a result of a person’s death.
Social assistance grants do not fall within the exceptions.
[24]
In this matter the grants made to the foster parent exceeded the
amounts that the children would have been entitled to had
their
foster parent not received the grants. The question put to the high
court in the stated case should have been answered on
the basis that
the dependants were not entitled to both the benefit of the foster
child grants and to damages for loss of support.
Both parties agreed
that they should bear their own costs on appeal. Equally, no costs
should be ordered against the curator in
the high court.
[25]
Accordingly the appeal is upheld and the order of the high court is
set aside and replaced with:
‘
The
foster child grants are to be taken into account in assessing the
damages to be awarded for loss of support, and, since these
exceed
the amount agreed to be payable as damages by the defendant, no order
as to payment is made.’
_______________________
C
H Lewis
Judge
of Appeal
APPEARANCES
For
Appellant: M Salie
Instructed
by: Robert Charles Attorneys, Cape Town
Webbers,
Bloemfontein
For
Respondent: E Benade
Instructed
by: Lester & Associates, Cape Town
Honey
Attorneys, Bloemfontein
[1]
Makhuvela
v Road Accident Fund
2010 (1) SA 29 (GSJ).
[2]
The
Road Accident Fund v N F Timis
[2010] ZASCA 30.
[3]
See the preamble to the Act.
[4]
Paragraph 6 in
Timis
.
[5]
Section 6.
[6]
Paragraph13.
[7]
Zysset
& others v Santam Ltd
1996 (1) SA 273
(C) at 278A-279C.
[8]
Paragraph 12.
[9]
Paragraph 5.
[10]
Paragraphs 6 and 7 of
Makhuvela
.
[11]
Lambrakis
v Santam Ltd
2002 (3) SA 710 (SCA).
[12]
Indrani
& another v African Guarantee & Indemnity Co Ltd
1968 (4) SA 606
(D) at 607F-H.
[13]
(1964) 81
SALJ
198.
[14]
Zysset
at 278H-J.