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[2010] ZAFSHC 3
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Free State Provincial Administration v Road Accident Fund (A47/07) [2010] ZAFSHC 3 (21 January 2010)
FREE
STATE
HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Appeal
No. :
A47/07
In
the appeal between:-
FREE
STATE PROVINCIAL ADMINISTRATION
APPELLANT
a
nd
ROAD
ACCIDENT FUND
RESPONDENT
_____________________________________________________
CORAM:
RAMPAI,
J et CJ MUSI, J
_____________________________________________________
HEARD
ON:
7
December 2009
_____________________________________________________
JUDGMENT
BY:
CJ
MUSI, J
_____________________________________________________
DELIVERED
ON:
21
January 2010
_____________________________________________________
[1] This
is
an appeal against a judgment of the magistrate: Bloemfontein. The
magistrate found that, even though the respondent (Road Accident
Fund
(the Fund)) admits liability to compensate a third party
1
,
Section 17 (5) read with Section 24 (3) of the Road Accident Fund Act
56 of 1996 (the Act) does not give the appellant (supplier)
a cause
of action to claim its costs, for services rendered to such third
party, directly from the Fund. Consequently, so reasoned
the
magistrate, a court may not make a costs order in favour of a
supplier that has instituted such an action. That decision is
the
subject of this appeal.
[2] The
facts of this matter are either common cause or agreed upon by the
parties.
[3] On
10 June 2004 a collision occurred between a motor vehicle with
registration numbers and letters BNJ 031 FS driven by a certain
G E
Visser (the insured driver) and a motor vehicle with registration
numbers and letters BYB 189 FS driven by a certain T J Sonjica
(the
third party). The third party sustained injuries as a result of the
collision.
[4] The
supplier provided hospital accommodation to the third party during
which period the supplier rendered certain health services
and
supplied goods to the third party. The total costs of the
accommodation and treatment amounted to R 268.00.
[5] On
9
February
2007 the supplier lodged a claim for the aforesaid amount at the
Fund. It also complied with the provisions of section
24 (1), 24 (3)
and 24 (6) of the Act
2
.
[6] Having
heard nothing from the Fund, the supplier issued summons, on 19 June
2007, for the recovery of the R 286.00. On 21 November
2007 the said
amount was paid into the supplier’s attorney’s account.
The Fund did not indicate why it paid the amount.
On 26 November 2007
the said attorneys wrote to the Fund informing it that the amount
will not be accepted as full and final payment
in respect of the
supplier’s claim. They insisted that the Fund pay the legal
costs because the money was paid after summons
was properly issued
and served.
[7] The
Fund refused to pay the legal costs. The parties agreed to argue the
costs issue before a magistrate. The parties informed
the magistrate
that the third party’s claim has successfully been finalised,
i.e. it was determined that he was entitled
to be compensated by the
Fund.
[8] The
supplier requested the magistrate to order the Fund to pay its taxed
party and party costs. The Fund opposed the request
and argued that
the supplier does not have a right to enforce its claim against it.
As authority for this proposition the Fund
referred the magistrate to
an article by Prof. Hennie Klopper (Klopper) which appeared in the De
Rebus
3
.
[9] The
magistrate dismissed the supplier’s claim for costs, with
costs. He referred the parties to another matter wherein
he was
confronted with a similar claim and requested that his reasons in
that matter be considered as his reasons for dismissing
this claim
4
.
[10] In
his judgment the magistrate surveyed, without analysing, the relevant
authorities including
Van
der Merwe v Road Accident Fund
5
and
Road
Accident Fund v Abdool – Carrim and Others
6
.
He quoted extensively from Klopper’s article and incorrectly
but unsurprisingly came to the following conclusion:
“By
die beoordeling van die argument voor die hof neem die hof (inag) dat
die verskaffer nie ‘n oorspronklike direkte
eis teen die
Padongelukfonds het nie. Die reg om betaling direk van die Fonds te
ontvang van bedrae wat kontraktueel aan die verskaffer
deur die derde
party verskuldig is, word ontleen van die bestaan en regsgeldigheid
van die derde party se eis teen die Fonds en
die derde party se
bewese geregtigheid van vergoeding ingevolge artikel 17(1) van die
Wet. Die verskaffer se eis om direkte betaling
vanaf die Fonds te
ontvang is verdermeer onderworpe aan die volle nakoming van artikel
17(5) en artikel 24(3) van die Wet.
Die
enigste reg wat die verskaffer teen die Fonds het is die reg wat
geskep was ingevolge artikel 17(5). Hierdie reg behels die
bevoegheid
om sonder die samewerking van die derde party, betaling van die Fonds
te ontvang vir die dienste gelewer, verblyf en
goedere gelewer aan
die derde party. Hierdie reg het reeds onstaan gegewe die feit dat
die meriete nie meer in geskil was nie.
Die argument dat die Fonds in
wese slegs met een eis te make het, oortuig in die omstandigheid in
die mate dat die eis van die
derde persoon die eis vir vergoeding of
verlies is ingevolge artikel 17(1) van die Wet. Die rekening van die
verskaffers vorm
dus ‘n integrale en ondeelbare gedeelte van
die eis en kan nie as afskeibare aparte eise teen die Fonds beskou
word nie.
Die Wet het verder ten doel om die wydste moontlike beskerming te
verleen wat betref die derde party se onvermoë om vergoeding
te
eis van ‘n aanspreeklike maar platsak bestuurder of eienaar.
Dit beteken egter nie dat die derde party eiser in alle gevalle
geregtig is op oorhoofse voordeel van gunstige interpretasie of
behandeling nie. Die Wet het nie ten doel om verskaffers se belange
te bevoordeel nie. Die verskaffer word nie benadeel met die uitleg
nie dat sy eis afhanklik is van die derde party nie. Die verskaffer
kan die derde party op grond van die kontraktuele gelewerde dienste
aanspreek.
Die
hof is by gevolg oortuig dat die eiser nie in die geval onder
bespreking enige reg op ‘n oorwig van waarskynlikhede bewys
het
om die koste van die Fonds te eis nie. Hierdie benadering blyk
verder in ooreenstemming te wees met die Appelhof se bespreking
en
bevinding in
MUTUAL INSURANCE v ADMINISTRATUER, TRANSVAAL 1961(2) SA 796(A)
waarin artikel 12 van Wet 29 van 1949 ontleed was wat in
pari
materia
ooreenstem
met die bepalings van artikel 17(5).
In
die lig van die nuwe argumente wat aangevoer was is die hof genoop om
af te wyk van my vorige beslissings op die punt.
In
die omstandighede bevind die hof dat die eis om die betaling van die
koste van die hand gewys word met koste.
Dieselfde
uitspraak sal volg in sake 6967/07 en 8450/07.
”
( My underlining)
[11] It
is clear from the
magistrate’s
reasons that this issue arose in numerous cases that he dealt with.
Klopper’s article seemingly caused
great confusion in the minds
of the magistrate and some practitioners. Mr Snellenberg, on behalf
of the supplier, limited his argument
to the doctrine of precedent.
Mr Zietsman, on behalf of the Fund, supported Klopper and the
magistrate in his heads of argument.
During argument he was
constrained to concede that the magistrate was wrong.
[12] The
magistrate found Klopper’s arguments so attractive and piquant
to the extent that he exalted it to a level that supersedes
the
pronouncements of the Supreme Court of Appeal on this issue. The
Supreme Court of Appeal has definitively stated that section
17(5) of
the Act confers on a supplier a statutory right to recover, directly
from the Fund, the costs of accommodation, treatment,
services or
goods instead of claiming such costs from the third party. And that
the supplier’s right to claim directly from
the Fund is an
accessory claim because it arises only if the third party is entitled
to claim the amount as part of his or her
compensation from the
Fund.
7
[13] The
magistrate decided, without justification, not to follow
Van
der Merwe
and
Abdool
– Carrim
.
He unusually and undeservedly embraced Klopper’s view and in
the process jettisoned an important doctrine of our law: the
doctrine
of precedent. The importance of this doctrine was emphasized recently
by the Supreme Court of Appeal in
TRUE
MOTIVES
84
(PTY) LTD v MAHDI & OTHERS
8
where Cameron JA, as he then was, said the following:
“[100]
The doctrine of precedent, which requires courts to follow the
decisions of coordinate and higher courts in the judicial
hierarchy,
is an intrinsic feature of the rule of law, which is in turn
foundational to our Constitution. Without precedent there
would be no
certainty, no predictability and no coherence. The courts would
operate in a tangle of unknowable considerations, which
all too soon
would become vulnerable to whim and fancy. Law would not rule. The
operation of precedent, and its proper implementation,
are therefore
vital constitutional questions.
[101]
However, it is well established that precedent is limited to the
binding basis (or
ratio
decidendi
)
of previous decisions. The doctrine obliges courts of equivalent
status and
those
subordinate in the hierarchy to follow only the binding basis of a
previous decision. Anything in a judgement that is subsidiary
is
considered to be ‘said along the wayside’, or ‘stated
as part of the journey’ (obiter dictum), and is
not binding on
subsequent courts.”
[14] In
Collett
v Priest
9
it was said: “
whatever
the reasons for a decision may be, it is the principle to be
extracted from the case, the
ratio
decidendi
,
which is binding and not necessarily the reason given for it”.
It is clear that
Van
der Merwe
and
Abdool
– Carrim
lay down a principle in relation to the interpretation of section
17(5) of the Act. The magistrate is bound by what was said in
those
cases, about the principle, and he had to follow them. He could not
whimsically or willy-nilly decide not to follow the principle
laid
down in those cases.
[15] On
the facts of this case the magistrate ought to have found that the
supplier had a right to sue the Fund directly for the
recovery of the
costs of the services that it rendered to the third party. That being
the case, it follows that the magistrate
had discretion to make an
order as to costs.
[16] This
would ordinarily be the end of this matter. Implicit, however, in the
magistrate’s reasoning and his acceptance
of Klopper’s
views is a finding that
Van
der Merwe
and
Abdool-
Carrim
were either wrongly decided or that they did not lay down a principle
and that he could therefore deviate therefrom. Seeing that
the
magistrate accepted Klopper’s arguments hook, line and sinker
the option of not examining some of Klopper’s assertions
is
unavailable to us.
10
[17] Section 17(5) of
the Act reads as follows:
“Where
a third party is entitled to compensation in terms of this section
and has incurred costs in respect of accommodation
of himself or
herself or any other person in a hospital or nursing home or the
treatment of or any services rendered or goods supplied
to himself or
herself or any other person, the person who provided the
accommodation or treatment or rendered the service or supplied
the
goods (the supplier) may, notwithstanding section 19(c) or (d), claim
an amount in accordance with the tariff contemplated
in subsection
(4B) direct from the Fund or an agent on a prescribed form, and such
claim shall be subject,
mutatis
mutandis,
to
the provisions applicable to the claim of the third party concerned,
and may not exceed the amount which the third party could,
but for
this subsection, have recovered.”
11
[18] Klopper
correctly asserts that a third party’s claim against the Fund
for compensation is a single, indivisible claim which is incapable
of
being split into different claims for loss of earnings, post medical
costs, future medical costs etc. In
Nokwali
v Road Accident Fund
12
,
Maya
JA summed it up as follows:
“Authorities
are Legion to the effect that a plaintiff who claimed compensation
for damages sustained as a result of wrongful
and negligent driving
under the Act’s predecessors 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. This
interpretation, in my view, necessarily
extends to claims brought
under the Act as it has the same objective and effect as these
previous statutes.”
[19]
Klopper
argues that the accounts of suppliers are usually an integral and
indivisible part of such claim and are not distinguishable
separate
claims against the Fund. He refuses to accept that section 17(5)
gives a supplier the right to claim directly from the
Fund because
the supplier’s claim is based on a contract for professional
services rendered to the third party. That agreement,
so he argues,
cannot create delictual liability between the supplier and the Fund.
[20] The
argument is strictly speaking correct but it unfortunately does not
recognise the fact that the Legislature has deliberately
created a
statutory exception. The argument is therefore devoid of context. If
section 17 (5) is examined in its proper context,
it becomes clear
that the Legislature has deliberately created a statutory exception
by giving a supplier a statutory right to
enforce its claim against
the Fund even though the Fund has not committed a delict against it.
[21] Klopper
contends that
Van
der Merwe
and
Abdool
– Carrim
do
not accurately reflect the true intention of the Legislature when it
enacted section 17 (5). He further argues that the Act was
not
enacted to advance the interest of suppliers.
13
[22] The
doubt created by Klopper as to the interpretation and scope of
section 17 (5) should be addressed by considering
(i) what the law was
before the measure was passed,
(ii) what the mischief
or defect was, for which the law did not
provide,
(iii) what remedy the
Legislature appointed,
(iv) and the reason for
the remedy.
After
considering these factors
I am enjoined to make such construction of the section as shall
suppress the mischief and advance the remedy.
14
An examination of the evolution of the section clearly, in my view,
shows the intention of the Legislature and the scope of the
section.
It is therefore apposite to examine the successive changes to the
legislation before considering the four factors mentioned
above.
[23] Section
12 of Act 29 of 1942
15
read as follows:
“
If
the costs of the accommodation of any person in a hospital or nursing
home or of any treatment of or service rendered or goods
supplied to
any person is included in any compensation for which a registered
company is liable under
Section
Eleven
the company shall pay that cost direct to the person who is entitled
to payment therefore, unless it has already been paid.”
16
This
section authorised the registered company
17
to pay the costs of the supplier directly to it, only if such cost
was included in the compensation of the third party, and it
was not
yet paid to the third party.
[24] Section
12 of Act 29 of 1942 was subsequently amended by section 4 of Act 27
0f 1952 to read as follows:
“If
the costs of the accommodation of any person in a hospital or nursing
home or of any treatment of or service rendered
or goods supplied to
any person is included in any compensation for which a registered
company is liable under
section
eleven
the company shall unless that cost has already been paid, pay that
cost direct to the person who is entitled to payment therefore
and
the said person
shall
be entitled to recover that cost from the company without any cession
of action
”.
(my underlining)
The
only difference between the original section 12 and the
amended
version is that the supplier is now expressly given a statutory right
to recover its cost from the registered company without
any cession
of action.
[25] It
is the amended version of section 12 that enjoyed the court’s
consideration in
AA
Mutual
Insurance
Association Ltd v Administrateur, TVL.
18
In that case the supplier instituted an action for payment of two
hundred pounds against the insurer for service rendered to the
third
party. The insurer argued that the costs in section 12 is costs that
is included in a fixed and determined amount as determined
by a
judgment or agreement which the insurer is liable to pay the third
party in terms of section 11. It was common cause that
the costs of
the supplier was not included in any compensation. The court had to
determine what was meant with the words
“is
included in any compensation for which a registered company is liable
under section 11”
.
The court came to the conclusion that the section is aimed at the
actual disposition of a part of the compensation or damages.
The
court found that the claim should be dismissed because there was no
fixed, due and payable amount of compensation or damages
which
included the supplier’s cost.
[27] In
AA
Mutual v Administrateur TVL
the court expressly refrained from considering the provisions of
section 7 of Act 31 of 1959 which substituted section 12 of Act
29 of
1942 as amended.
19
[28] Section
7 of Act 31 of 1959 read as follows:
“The following
section is hereby substituted for section twelve of the principal
Act:
12. (1) Where –
(a) The compensation for which a registered
company
is liable under section eleven,
includes
the amount of any costs incurred in
respect
of the accommodation of any person
in
a hospital or nursing home or of any
treatment
of or service rendered or goods
supplied
to any person; or
A
registered company has agreed to make
any
payment in settlement of a claim for compensation under the section,
and the compensation claimed could, if the company were
liable for
the payment thereof, have included such costs, the registered company
shall, subject to the provisions of sub-sections
(2) and (3), pay any
amount which may be due in respect of such costs direct to the
person to whom that amount is due, and that
person shall be entitled
to recover such costs from the company without any cession of action:
Provided that the total amount payable
in respect of such costs under
the circumstances described in paragraph (b) shall not in any case
exceed one hundred pounds.
[29] This
section broadened the scope to include settlement agreements. All it
said was that if the registered company settles a
claim and the
compensation claimed could, if the company was liable, include the
payment of the supplier’s costs such costs
shall be paid
directly to the supplier provided that the supplier’s claim
does not exceed one hundred pounds. The right of
the supplier to sue
without cession of action is retained. There had to be a determined
amount of compensation.
[30] The
next step of the evolution is section 26(1) of Act 56 of 1972.
20
The section read as follows:
“
26.
(1) Where the obligation of an authorized insurer to compensate any
third party under section 21, includes a liability for
costs which
have been incurred in respect of the accommodation of any person in
hospital or nursing home or the treatment of or
any service rendered
or goods supplied to any person –
the
authorised insurer shall, if the amount of the
compensation
payable by it has been determined in any manner, pay such part of
that amount as represents such costs due to the person
who provided
the accommodation or treatment or rendered the service or supplied
the goods (in this section referred the service
or supplier), direct
to the supplier who shall be entitled to recover the said part from
the authorized insurer without any cession
of action:
the
supplier shall, if the said amount has not been
determined
and the authorized insurer has not in terms of any agreement been
released from its obligation to compensate the third
party in respect
of such cost, be entitled without any cession of action to recover
from the authorized insurer so much of the
said costs so due as the
third party is entitled to recover from it.
The
right of action conferred by subsection (1) (b)
may
be exercised by the supplier by intervening in any legal proceedings
instituted and subject
mutatis
mutandis
to the provision of section 25, by instituting legal proceedings at
any time at which such proceeding may be instituted by the
third
party, and shall not, after it has been so exercised, be affected by
any agreement whereby the authorized insurer is released
from its
obligation to compensate the third party in respect of such costs.
[31] In
terms of this section the amount payable to the third party had to be
determined in any manner and that part which had to
be paid to the
supplier must be paid directly. If the amount has not been determined
and the authorized insurer has not in terms
of any agreement been
released from its obligation to compensate the third party in respect
of such costs, the supplier may sue
the insurer for its costs,
limited to what the third party is entitled to recover from the
insurer. This is a clear break from
the decision in
AA
Mutual v Administrateur TVL
.
Aware of the judicial interpretation in
AA
Mutual v Administrateur TVL
the Legislature changed the wording of the new section in order to
address the effects of the aforementioned judgment. The supplier
was
given a right to institute action irrespective of whether the
compensation amount has been determined by judgment or agreement.
Subsection 2 sets out how the right of action may be exercised.
[32] Act
56 of 1972 was repealed by Act 84 of 1986.
21
Section 8(6) of this Act read as follows:
“Where
a third party is entitled to compensation in terms of this section
and has incurred costs in respect of accommodation
of himself or any
other person in a hospital or nursing home or the treatment of any
service rendered or goods supplied to himself
or any other person,
the person who provided the accommodation or treatment or rendered
the service or supplied the goods(in this
case called the supplier)
may claim the amount direct from the MVA Fund or the appointed agent,
as the case may be, on a prescribed
form, and such a claim shall be
subject,
mutatis
mutandis
,
to the provisions applicable to the claim of the third party
concerned.”
[32] Act
84 of 1986 was repealed by Act 56 of 1996. Section 17(5) of the Act,
before being substituted by section 6 of Act 19 of
2005, was in all
material respects the same as section 8(6) of Act 84 of 1986.
Section17 (5) however went further and stated that
the amount that
the supplier claims may not exceed the amount that the third party
could have recovered from the Fund. The only
difference between the
previous and current section 17 (5) is that the words
(notwithstanding
section 19 (c) or (d)… an in accordance with the tariff
contemplated in subsection (4b))
were
inserted.
22
[33] I
have set out the history of this section to illustrate that it (the
history) destroys the whole foundation on which Klopper’s
argument is based. I now revert to the factors mentioned in paragraph
22 above.
[34] This
section was obviously enacted to prevent the mischief mentioned in
AA
Mutual v Administateur TVL
,
i.e. to prevent the compensated third party, where such compensation
includes the costs of the supplier, from using that portion
of the
compensation for purposes other than paying the supplier that is
entitled to it.
23
The remedy that the Legislature appointed changed progressively over
the years from obliging the company to pay the supplier directly;
to
giving the supplier the right to recover its costs from the company
without any cession of action if such cost was included
in the
compensation of the third party and it has not yet been paid to such
third party; to giving the supplier the right to intervene
in legal
proceedings instituted by the third party against the insurer or to
institute legal proceedings on its own against the
insurer at anytime
before the third party’s claim prescribes. The current section
17(5) gives the supplier the right to claim
its costs from the Fund
subject, with the necessary changes, to the provisions applicable to
the claim of the third party concerned.
24
The reason for the remedy is aptly stated by Cachalia JA in
Abdool-Carrim
25
where he stated that:
“
The
benefit to the supplier is that the Fund guarantees payment subject
only to the condition that the third party must be entitled
to claim
the amount as part of his or her compensation and that the amount
that the supplier may recover may not exceed the amount
which the
third party is entitled
to recover. The advantage to third parties, who are often indigent,
is that they receive medical services comforted by the knowledge
that
their medical cost are covered and that they are less likely to be
faced with a claim before having been paid.”
[35] In
Free
State Consolidated Gold Mines v Multilateral MVA Fund
26
.
Lombard J discussed section 44 of the Multilateral Motor Vehicles
Accident Fund Act (MMF)
27
,
which is in all material respects the same as section 17(5) before
the 2005 substitution. He said the following about that section:
“
It
is accepted that the said article was promulgated in the interests of
suppliers of medical treatment and to grant them an independent
right
to recover from the defendant what the third party could have
recovered in respect of such treatment. The purpose of article 44
is
to afford the supplier a choice between stepping into the shoes of
the third party in respect of that part of his claim so that
it can
control the speed and efficiency of the process itself or to leave it
in the hands of the third party to recover it as part
of his claim
for general damages, etc, a process over which it has very little, if
any, control. The advantages of the former and
potential
disadvantages of the latter are self-evident. Article 44 provides a
ready remedy for the supplier and prevents him from
being kept
waiting for his money for years, a situation which is easy to
understand if regard is had to the well-known fact that
many third
parties are indigent in the sense that they cannot afford to pay for
such treatment out of their own pockets and furthermore
because their
accounts are generally not seriously disputed insofar as their
correctness and/or reasonableness is concerned and
are mostly
accepted without insisting on proving every injection or tablet.
28
Free
State Consolidated Gold Mines
was
decided on 5 February 1996. The
Road Accident Fund Act was
assented
on 24 October 1996 and commenced on 1 May 1997. It must be presumed
that the Legislature was aware of Lombard J’s
interpretation
when it enacted section 17(5) of the Act.
29
Devenish says the following in relation to Legislative ‘omniscience’:
“
If
two statutes are in
pari
materia
,
any judicial decision as to the construction of one ‘is a sound
rule of construction for the other’. In another English
case it
is stated:
“…
When
a particular form of Legislative enactment which has received
authoritative interpretation whether by judicial decision or
by a
long course of practice, is adopted in the framing of a later
statutes, it is a sound rule of construction to hold that the
words
so adopted were intended by the Legislature to bear the meaning which
had been so put upon them”
This
means,
in effect, that the Legislature is presumed to know the state of the
law at the time of the passing of any Act and to know the
interpretation which has been placed upon words and expressions in
prior Acts. Thus when a particular provision has received a
judicial
interpretation and the Legislature has then re-enacted it or included
it in a statute in
pari
materia
,
the court can validly assume that the Legislature intends the
provision to bear the judicial interpretation previously placed
on
it.”
30
After
the MMF was repealed the Legislature retained the words used in that
Act in the current
Road Accident Fund Act and
its subsequent
amendments.
[36]
The
Legislature kept the supplier’s right to institute action
against the company, insurer or Fund intact since 1952. There
is no
indication since 1952 that the Legislature wanted to take away that
right. If anything that right has been refined over the
years to give
suppliers more protection by making it easier for them to claim their
costs. The metamorphosis of
section 17(5)
clearly shows that it was
primarily enacted for the benefit of suppliers. The construction of
section 17(5)
in
Van
der Merwe
and
Abdool
– Carrim
suppresses the mischief and advances the appointed remedy. The
mischief of misappropriation is suppressed and the appointed remedy
of giving the supplier a claim against the Fund for services rendered
to a third party where such third party is entitled to compensation
is advanced for the reasons mentioned in paragraphs 34 and 35 above.
[3
7] Klopper’s
reliance on
AA
Mutual v Administrateur TVL
is clearly misplaced and devoid of context. A careful reading of that
case repays attention with understanding. The court had to
decide a
specific issue in the context of a particular provision
31
.
The supplier’s right to claim its costs directly from the
company was expressly recognised and accepted by the court.
32
AA
Mutual v Administrateur TVL
is also not authority for the proposition that section 17(5) of the
Act simply or only empowers the Fund to pay the amount owed
to a
supplier out of the compensation which has accrued to a third party
in terms of section 17(1) of the Act.
AA
Mutual v Administrateur TVL
clearly states that the supplier’s claim against the registered
company is subject to the third party having instituted a
claim and
an award for compensation, which includes the costs of the supplier,
having been made in favour of such third party.
If those factors are
present and the third party has complied with all the other
requirements for lodging its claim it then acquired
the right to sue
for the recovery of its costs.
33
[37] Klopper
asserts that a supplier’s right in terms of section 17(5) is
strictly speaking not a claim against the Fund.
34
He unfortunately does not tell us what it is. The Act refers to a
third party’s claim and a supplier’s claim. The supplier
is given a right to claim the amount of the service, treatment or
accommodation directly from the Fund. Klopper does not explain
why
the word claim is used by the Legislature if the intention was only
to empower the Fund to pay the amount owed by the third
party to a
supplier out of the compensation which has accrued to the third
party. In my view the supplier is given a claimable
right.
35
Elsewhere in his article Klopper laments the fact that Cachalia JA’s
interpretation of section17 (5) is in direct conflict
with the actual
wording of the section.
36
He does not explain why he chooses to deviate from the actual wording
of the section.
[
38] It
just does not make sense to give the third party an enforceable claim
but deny the supplier the right to enforce its claim.
This anomaly is
clearly demonstrated in
Abdool
– Carrim
,
where it was said that:
“For
if a third party’s claim is valid and enforceable and the
supplier’s is not, the Fund would still be liable
to compensate
the third party who in turn remains contractually liable to the
supplier. The consequence is that a third party may
be faced with a
claim from a supplier without having been paid and would be denied
the benefits of section 17(5) without any fault
on his or her part.
This result could hardly have been what the draftsman intended
moreover, it is illogical for the third party’s
claim to be
valid and enforceable but the supplier’s accessory claim not
(except where the supplier has not complied with
the prescribed
formalities)”.
37
[39] Klopper’s
assertion that section 17(5) read with section 24(3) does not give a
supplier the right to issue summons for
the recovery of its costs is
wrong. The magistrate’s reliance on Kloppers article was
therefore totally misplaced.
[40] Mr
Zietsman argued that if we find that the supplier has a right to
claim directly from the Fund we should dispose of the matter
by
making the appropriate costs order that the magistrate should have
made. He urged as to find as a matter of policy, that costs
orders
should not be made in favour of suppliers that institute action
before the third party’s claim has been finalised
or before the
third party has submitted a claim and complied with the prescribed
procedure. As authority for this proposition he
relied on the remark
by Cachalia JA where he said:
“
Put
another way the right arises only if the third party
has a valid and enforceable claim against the Fund
and
has
complied
with the necessary formalities such as submitting a
claim
in compliance with the prescribed procedure
.
The supplier’s
claim is therefore dependent upon the third party being
able
to establish his or her claim. In this sense it may aptly
be prescribed
as an accessory claim.”
38
(My underlining)
[41] Cachalia
JA was not stating a principle. It was an obiter remark. The supplier
may, in my view, independently without waiting
for the third party to
submit his/her claim, claim its costs directly from the Fund. The
accessory nature of the supplier’s
claim lies not in its
dependence on the third party actually submitting or prosecuting
his/her claim but in it establishing that
the third party is entitled
to claim the costs as part of his/her compensation from the Fund. In
essence what the supplier will
have to prove is that the third party
would have been successful (totally or partially) if the latter
instituted a claim against
the fund which included the supplier’s
costs.
[42] In
order to be successful the supplier will have to prove that the third
party is (at date of summons) entitled to claim the
costs as part of
his/her compensation (whether or not she/he has submitted a claim);
that it rendered medical services goods or
accommodation to the third
party; that it complied with all the formalities in the Act and that
its claim does not exceed the amount
which the third party could, but
for section 17(5), have recovered from the Fund.
[43] If
the supplier’s claim is made subject to the third party
actually submitting a claim it would defeat the purpose of
the
section. Many people who sustain injuries caused by the negligent
driving of an insured driver as a result of which they receive
accommodation or other medical services from suppliers do not submit
third party claims, for whatever reason, even though they
are
entitled to. It would be absurd to negate a supplier’s right to
claim its costs where a third party who is entitled to
compensation
which includes the supplier’s costs does not claim from the
Fund.
[44
] I
do not consider it wise to make such a policy pronouncement in view
of the supplier’s right to independently claim its
costs from
the Fund. In any event, Mr Zietsman could not tell us why the Fund
did not pay the R280.00 after it received the supplier’s
claim
on the prescribed form before summons was issued. Mr Snellenberg was
not in a better position; he too did not have all the
details at
hand. The magistrate’s finding robbed the parties of the
opportunity to address these and other issues. In my
view the issue
of costs should be argued before the same or another magistrate. The
magistrate should then apply his/her mind to
the arguments and
exercise his/her discretion judicially.
[45] There
is no reason why the costs of the appeal should not follow the
success.
[46] I
accordingly make the following order:
a)
The appeal is upheld with costs.
b) The
magistrate’s order is set aside and substituted by an order
that the appellant (supplier) is entitled to claim its
costs directly
from the respondent (Fund).
c)
The matter is remitted to the court a quo to hear argument
in respect of costs and to make an appropriate
costs order.
________________
C.J.
MUSI, J
I concur
________________
M.
H. RAMPAI, J
On
behalf of the appellant:
Adv
N Snellenberg
Instructed by: Podbielski Mhlambi Inc.
WELKOM
On
behalf of the respondents: Adv PJJ Zietsman
Instructed by: Neumann Van Rooyen Sesele. WELKOM
/
mar
1
In terms of section 17 (1) of the Act the Fund or
an agent shall be obliged to compensate any person (the third party)
for any
loss or damage which the third party has suffered as a
result of any bodily injury to himself or herself or the death of
or
any bodily injury to any other person, caused by or arising from
the driving of a motor vehicle by any person at any place within
the Republic, if the injury or death is due to the negligence or
other wrongful act of the driver or of the owner of the motor
vehicle or of his or her employee in the performance of the
employee’s duties as employee.
2
Section 24(1), 24(3) and 24(6) reads:
Procedure. - (1) A
claim for compensation and accompanying medical report under section
17 (1) shall –
be set out in the
prescribed form , which shall be completed in all its particulars;
be sent by
registered post or delivered by hand to the Fund at its principal,
branch or regional office, or to the agent who
in terms of section
8 must handle the claim, at the agent’s registered office or
local branch office, and the Fund or
such agent shall at the time
of delivery by hand acknowledge receipt thereof and the date of
such receipt in writing...
(3) A claim by a supplier for the payment of expenses in terms of
section 17 (5) shall be in the prescribed form, and the
provisions of this section shall apply
mutatis mutandis
in
respect of the completion of such form.
No claim shall be
enforceable by legal proceedings commenced by a summons served on
the fund or an agent –
before the expiry of
a period of 120 days from the date on which the claim was sent or
delivered by hand to the Fund or the
agent as contemplated in
subsection (1); and
before all
requirements contemplated in section 19 (f) have been complied
with.
3
See De Rebus: August 2008 No 478 at page 18
4
Case no 786/07
5
2007 (6) SA 283
(SCA)
6
[2008] ZASCA 18
;
2008 (3) SA 579
(SCA)
7
See Van der Merwe supra at paragraph 7 and
Abdool-Carrim at paragraph 8
8
2009 ZASCA 4
judgment delivered on 3 March 2009
at paragraphs 100 and 101
9
1931 AD 290
at 302
10
Only those assertions relevant for the adjudication of this case
will be examined.
11
It is common cause, in this case, that the third party is entitled
to compensation.
12
(2008) ZASCA 3
judgement delivered 6 March 2008 at paragraph 8.
13
Page 20 column 2
14
See Olley v Maasdorp and Another
1948 (4) SA 657
(AD) at 666,Hleka v Johannesburg City
Council
1949 (1) SA
842
(AD) at 852 to 853, S v Conifer (Pty) Ltd
1974 (1) SA 651
(AD)
at 655 D-E
15
The Motor Vehicle Insurance Act.
16
The relevant part of section 11 reads as follows:
“Section 11
authorizes registered company to compensate a third party suffered
as a result of bodily injury to himself
or herself or the
death or bodily injury to any person caused by or arising out of
negligent driving of the insured driver”
17
Registered company was defined as an insurance
company which has been named by the Minister or acting Minister of
Finance which
was willing to undertake the Insurance of motor
vehicles.
18
1961(2) SA 796 (AA)
19
See page
802 F
20
Compulsory Motor Vehicle Insurance Act
21
The Motor Vehicle Accident Act
22
See AA Mutual v Administrateur TVL at 805 A-B
23
See AA Mutual v Dministrateur TVL at 805 A-B.
24
Provided of course, the third party is entitled
to claim the costs as part of his/her to compensation and from the
Fund, the
supplier has complied with the other prescripts of the
Act.
25
At paragraph 8
26
1997 (4) SA 930(0)
27
Act 93
of 1989. Section 44 read as follows:
“Where
a third party is entitled to compensation in terms of this section
and has incurred costs in respect of accommodation
of himself or any
other person in a hospital or nursing home or the treatment of any
service rendered or goods supplied to himself
or any other person,
the person who provided the accommodation or treatment or rendered
the service or supplied the goods(in
this case called the
supplier) may claim the amount direct from the MMF or the appointed
agent, as the case may be, on
a prescribed form, and such a claim
shall be subject,
mutatis
mutandis
,
to the provisions applicable to the claim of the third party
concerned, and may not exceed the amount which the third party
could, but for the provisions of this Article, have recovered
.”
28
At 946 G to 947 A
29
In
Terblanche v SA
Eagle Insurance Co Ltd
1983 (2) SA
501(N)
at 504 F Friedman J stated that “It is a rule of
statutory interpretation that the Legislature is presumed to be
acquainted
with the state of the law”
30
Interpretation
of Statutes 1
st
Ed Juta 1992
at page 134 to 135. footnotes omitted
31
See paragraph 25 above
32
At 804 D-E where the court said “Daarvoor
word uitdruklik voorsiening gemaak deur die verskaffer ‘n reg
op verhaal
teen die maatskappy sonder sessie van aksie te verleen.”
33
At 805 B-C.
34
At page 21 column 1.
35
In
Avondson Trust
(Pty) Ltd. v Wouda
1975 (2) SA 444
(TPD) at 450 H to 451 A, F.S Steyn J albeit in another context said
that the definition of the noun “claim”
by the leading dictionaries confirm the essential nature of a claim
to be, in contrast to a right against another person in general,
the
assertable nature of the right.
36
Page 20 column 1.
37
Paragraph 12
38
See
Van der Merwe v RAF
at pargraph 7