Road Accident Fund v Arendse NO (030/2002) [2002] ZASCA 150; [2003] 1 All SA 139 (SCA) (29 November 2002)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2002
>>
[2002] ZASCA 150
|

|

Road Accident Fund v Arendse NO (030/2002) [2002] ZASCA 150; [2003] 1 All SA 139 (SCA); 2003 (2) SA 490 (SCA) (29 November 2002)

THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
Reportable
CASE NO. 030/2002
In the matter between
ROAD
ACCIDENT FUND Appellant
And
PATRICK NORMAN ARENDSE
NO Respondent
____________________________________________________________
CORAM: HARMS, SCHUTZ, CAMERON, NAVSA and CONRADIE JJA
HEARD: 15
NOVEMBER 2002
DELIVERED: 29 NOVEMBER 2002
____________________________________________________________
Undertaking by Road Accident Fund – cost of
administering undertaking not claimed by way of compensation and
consequently not included
in settlement – cannot be claimed
subsequently
_____________________________________________________________
JUDGMENT
CONRADIE
JA
[1]
Before
the establishment of the Road Accident Fund (‘the RAF’) by
section 2(1) of the Road Accident Fund Act 56 of 1996 (‘the
RAFA’),
compensation for road accident victims was paid by a fund (‘the
MMF’) established by the Multilateral Motor Vehicle
Accidents Fund
Act 93 of 1989 (‘the MMF Act’). Section 2(2)(a) of the RAFA
abolished the MMF. All its assets and liabilities,
rights and
obligations were taken over by the RAF.
[2]
The MMF Act incorporated a schedule containing the text of the
agreement setting up the MMF. Article 40 of the schedule provided
:
‘
The MMF or its appointed agent, as the case may be,
shall subject to the provisions of this Agreement be obliged to
compensate any
person whomsoever (in this Agreement called the third
party) for any loss or damage which the third party has suffered as a
result
of-
any
bodily injury to himself;
the
death of or any bodily injury to any person, in either case caused
by or arising out of the driving of a motor vehicle by any
person…’
1
[3]
Article 43(a) of the schedule to the MMF Act
provided that-
‘Where a claim for compensation under article 40 -
(a) 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 goods to him, the
MMF or its appointed agent shall be entitled, after furnishing the
third party concerned
with an undertaking to that effect or a
competent court has directed the MMF or its appointed agent to
furnish such undertaking,
to compensate the third party in respect of
the said costs after the costs have been incurred and on proof
thereof.’
2
[4]
The respondent is the father and natural guardian of his minor
daughter Cindy who was severely injured in a road accident in
September
1991. In an action brought by the respondent on his own and
Cindy’s behalf he claimed damages in respect of the cost of future
hospital accommodation and medical treatment. In terms of a
settlement agreement, the MMF’s appointed agent, the South African
Eagle Insurance Company Limited (‘SA Eagle’), gave to the
respondent, and to Cindy herself once she came to be a major, an
undertaking
under article 43(a) which was guaranteed by the MMF. It
also agreed to pay the costs of a
curator bonis
to administer
the damages award. After the settlement the respondent’s legal
advisers decided not to proceed with the application
for the
appointment of a
curator bonis
but instead to form a trust to
administer the damages award. A sum of R22 810 00 which had been
agreed as the capitalized cost of
remunerating the
curator bonis
was then paid to the trust to cover the costs of its
administration. One of the trustees is Mr Halliday, the respondent’s
attorney
of record.
[5]
In terms of the undertaking S A Eagle –
‘
having settled the claim for compensation under
Article 40 of the Schedule to the Multilateral Motor Vehicle
Accidents Fund Act…hereby
undertakes under Article 43(a) of the
Schedule to the said Act to compensate the parties, acting on behalf
of Cindy Patricia Arendse,
as recorded in the document styled as
“Agreement of Settlement” dated 16 and 17 April 1996, appended
hereto, for the costs of
the future accommodation of Cindy Patricia
Arendse in a hospital or nursing home or treatment of or rendering of
a service or the
supplying of goods to the said Cindy Patricia
Arendse after the costs have been incurred and on proof thereof.’
[6]
At a later stage the MMF took over S A Eagle’s liability in terms
of the undertaking and later still the RAF took over the liability
when it stepped into the shoes of the MMF.
[7]
The respondent is a labourer with a grade
five education. He says that he is not equal to the task of
administering the undertaking,
something which it is his duty as
Cindy’s guardian to do. I am prepared to accept that there are some
aspects of the administration
of the undertaking that would be beyond
him. For the reasons that follow I am nevertheless not persuaded that
he is entitled to the
declaratory order made by Msimang AJ in the
Court
a quo.
This reads:
‘
1 The costs incurred by Mr Halliday,
qua
attorney, for the services rendered by him on behalf of the Applicant
in administering the Article 43(a) undertaking furnished in
terms of
the Schedule to the Multilateral Motor Vehicle Accidents Fund Act 93
of 1989 fall within the meaning of the said undertaking;
2 The Respondent is liable to compensate the Applicant
in respect of the said costs after the costs have been incurred and
on proof
thereof.’
[8]
Before the introduction of the predecessor
to article 43(a),
3
a court hearing an action for damages in a running down case would
have had to apply the ‘once and for all principle’.
4
This obliged it to award then and there (and consequently to assess
and quantify) in one and the same proceeding any claim for damages
proved to have been suffered by a plaintiff. No matter how anxiously
a court peered into the future when assessing future hospital
or
medical expenses, or the costs of goods and services, it risked
awarding either too much or too little. Yet, nothing could be
left
over in order to see how things turned out. Then came s 21(1C) of the
Compulsory Motor Vehicle Insurance Act 56 of 1972.
5
Its purpose was to take the guesswork out of the assessment of
damages of this kind. Since the introduction of the amendment such
damages could be paid as damage eventuated.
[9]
It is against this background that article 43 (a) must be
interpreted. Its purpose, like that of its predecessor and of its
successor,
was to help solve the quantification problem, nothing
more. It could be invoked by the MMF (or its appointed agent) in
every case
in which there was a claim for compensation under article
40 which included a claim for the cost of future accommodation of the
plaintiff
in a nursing home or for (medical) treatment or for the
supply of goods or services. Article 43(b) served the same purpose in
relation
to an award for loss of future earnings or support. If
there was a claim or claims of this kind the MM (if it accepted
liability
or was adjudged liable) might in its sole discretion decide
to tender an undertaking instead of paying damages to the plaintiff
in
a lump sum.
6
[10]
The cost of the attorney’s services which
were rendered in this case (leaving aside that it is not at all clear
on the papers
that they were rendered to the respondent and not to
the trust) had not been claimed in the plaintiff’s particulars of
claim as
part of the respondent’s or of Cindy’s damages. When S A
Eagle offered to compensate the respondent for the future costs of
‘rendering
of a service’, it was not agreeing to pay the costs of
the future administration of the undertaking. It was offering an
undertaking
only in respect of costs of the kind set out in article
43(a) which were included in the respondent’s claim for
compensation and
for which it was prepared to assume liability.
7
[
11
]
The RAF’s liability to a third party is to compensate him or her
for ‘loss or damage.’ Whether the costs of services of the
kind
rendered by Mr Halliday could in an appropriate case justifiably be
claimed in a summons as future ‘loss or damage,’ and
so qualify
for inclusion in an undertaking offered by the RAF or ordered by the
Court, is a matter that does not arise for decision.
I refrain from
saying anything about it one way or the other.
[12]
Another difficulty stands in the
respondent’s way. If he had gone ahead with the original idea of
having a
curator bonis
appointed to Cindy’s estate, the
curator would, as part and parcel of administering the estate, have
been obliged to pay and claim
reimbursement for accounts for the
payment of which the RAF was responsible. The quantum of the
curator’s remuneration for attending
to the estate had been
settled. Now that trustees have been appointed instead, it seems
extraordinary for them to say that the administration
of the
undertaking is really the respondent’s responsibility and that if
they themselves now administer it on the respondent’s
behalf they
are to be remunerated beyond what a curator would have received for
doing the same thing.
[13]
In the light of the questions of general importance for the RAF
raised in the appeal, Mr Dickerson who appeared on its behalf fairly
did not press for costs, either in this Court or in the Court below.
The
appeal succeeds. The order of the Court
a quo
is altered to
read: ‘The application is dismissed.’
---------------------------------------
J
H CONRADIE
JUDGE
OF APPEAL
HARMS
JA )
SCHUTZ
JA ) CONCUR
CAMERON
JA )
NAVSA
JA )
1
This provision has been reenacted in much the same form by section
17(1) of the RAFA.
2
The successor to this provision is to be found in practically the
same terms in section 17(4)(a) of the RAFA
3
Section 21(1C) of the Compulsory Motor Vehicle Insurance Act 56 of
1972.
4
See
Marine and Trade Insurance Co Ltd v Katz NO
1979 (4) SA
961 (A) where earlier decisions on this point are approved (at 970C
– G)
5
It was introduced into the principal Act by s 8 of Act 69 of 1978
with effect from 1 September 1978.
6
The corresponding section in force at present is 17(4)(a) and (b) of
the RAFA
7
Like the costs of the
curator bonis.
See
Reyneke NO v
Mutual and Federal Insurance Co Ltd
1992 (2) SA 417 (T) at 419 D
– J.