Summary of Judgment

1. Introduction

This matter concerned an appeal to the Supreme Court of Appeal against a decision of the erstwhile Witwatersrand Local Division upholding an exception to particulars of claim. The appellant, David Mamuru Mokholwane (the plaintiff in the action), sued the respondent, Pro Honda (the defendant in the action), for damages arising from bodily injuries sustained in a motor cycle accident.

The procedural history was that the defendant delivered an exception to the plaintiff’s particulars of claim on the basis that the plaintiff’s pleaded case fell within the statutory compensation scheme created by the Multilateral Motor Vehicle Accidents Act 93 of 1989 and the Statutory Agreement scheduled thereto, with the consequence (so it was contended) that the plaintiff was barred from suing the defendant directly. The court a quo upheld the exception with costs, set aside the particulars of claim, and granted leave to amend within 14 days. The plaintiff appealed with leave.

The general subject-matter of the dispute was whether, on the plaintiff’s pleaded allegations, the claim was excluded by Article 52 of the Statutory Agreement because it was a claim for bodily injury “caused by or arising out of the driving of a motor vehicle” in respect of which a third party would be entitled to claim compensation from the Multilateral Motor Vehicle Accidents Fund (MMF) or its appointed agent.

Two preliminary applications also arose on appeal. The plaintiff sought condonation for late lodging of the power of attorney and appeal record, and separately sought an amendment to the particulars of claim to delete an allegation that the defendant was the owner of the motor cycle.

2. Material Facts

It was common cause on the pleadings that on 9 October 1991 the plaintiff sustained serious bodily injuries in Harrow Road, Johannesburg, when the front brakes of the motor cycle he was driving locked, causing the motor cycle to overturn and throwing him to the ground.

At the time of the accident, the plaintiff was employed as a messenger and motor cycle driver by Urban Townhouse Management (Pty) Ltd (the employer). The motor cycle had been leased by the employer from the defendant under a written lease agreement for a period of two years, enduring until 17 June 1993.

The plaintiff’s pleaded case attributed the brake-locking (and consequent accident) to the defendant’s negligence or breach of contract in relation to a 12 500 km service and repairs allegedly carried out on the motor cycle the previous day. The service and repairs were alleged to have been performed pursuant to an oral agreement concluded between the plaintiff (representing the employer) and the defendant.

A central pleaded allegation, relied on by the defendant for purposes of exception, was that the defendant was the “owner” of the motor cycle. The defendant’s exception proceeded on the basis that (accepting the pleaded “ownership” allegation) the plaintiff’s claim was one that had to be pursued against the MMF or its agent, and that Article 52 therefore barred the claim against the defendant.

3. Legal Issues

The central legal question was whether the particulars of claim, as pleaded, disclosed a cause of action against the defendant or whether the claim was statutorily precluded because it fell within the MMF compensation scheme under the Statutory Agreement.

This depended on whether, on the pleaded facts, the plaintiff would be “entitled” under Article 40 to compensation from the MMF or its agent, and if so whether Article 52 barred a direct claim against the relevant persons (including the “owner” and driver). A critical sub-issue was the proper construction and application of the Statutory Agreement’s definition of “owner” in Article 1, particularly in relation to a motor vehicle leased for at least twelve months.

The dispute was primarily one of law, namely statutory interpretation of defined terms and their consequences for the availability of an exception, together with the application of that legal meaning to the pleaded facts (specifically, the existence and duration of the lease).

Costs raised an additional issue involving a discretionary/value judgment, especially because the decisive point on appeal was identified by the appellate court itself rather than having been raised by the parties earlier.

4. Court’s Reasoning

The Supreme Court of Appeal approached the exception by reference to the statutory scheme. It noted that Article 52 (in relevant part) bars a third party from claiming compensation from the “owner” or driver of a motor vehicle if the third party is entitled to compensation under the Agreement from the MMF or its agent, subject to an exception where the MMF or agent is unable to pay. The gateway to entitlement is found in Article 40, which obliges the MMF or its agent to compensate a person for bodily injury “caused by or arising out of the driving of a motor vehicle” where the injury is due to the negligence or other unlawful act of the driver, or the owner, or the owner’s servant in execution of duty.

The Court held that the court a quo, in treating the defendant as the relevant “owner” for purposes of Articles 40 and 52, had overlooked the Statutory Agreement’s definition of “owner” in Article 1. Under Article 1, in relation to “a motor vehicle under an agreement of lease for a period of at least twelve (12) months”, “owner” means the lessee concerned. Given that the pleaded lease was for two years, the lessee (the employer) was the “owner” for purposes of the statutory scheme, and not the defendant lessor.

The Court emphasised that Article 1 did not state that the word “owner” includes the lessee in such circumstances; it stated that “owner” means the lessee. Accordingly, within this statutory context the term does not bear its ordinary common-law meaning. The Court referred to authority illustrating the approach to such statutory definitions and their effect on ordinary meaning.

On that basis, the Court reasoned that Articles 40 and 52, insofar as they speak of the “owner”, applied to the lessee to the exclusion of the common-law owner where the lease-duration requirement was met. Since the plaintiff’s action was not brought against the lessee (the statutory “owner”), the Court concluded that the statutory bar contained in Article 52 did not, on the pleaded case, preclude the plaintiff’s claim against the defendant. It followed that the exception ought to have been dismissed.

As to costs, the Court addressed two preliminary applications. It granted condonation for late filing, noting that the respondent opposed only on lack of prospects, and ordered the plaintiff to pay the costs of that application. The plaintiff’s application to amend the particulars of claim (to delete the ownership allegation) was not proceeded with; the Court refused it and awarded costs against the plaintiff.

The Court then considered costs in the appeal and in the court a quo. It noted the general rule that a successful appellant is ordinarily entitled to costs, but also that costs remain discretionary. The Court further considered the significance that the plaintiff succeeded on a point raised by the appellate court itself, and referred to authority recognising that this can influence costs, including by considering what course the litigation would have taken had the point been raised earlier.

Applying these considerations, the Court reasoned that if the point about the statutory definition of “owner” had been taken in the court a quo, the exception would not have succeeded and the appeal costs might have been avoided. The Court also took into account that the plaintiff’s pleading had unnecessarily alleged ownership (apparently in the common-law sense) even though ownership was not an element of the pleaded delictual or contractual claims, and that this pleading contributed to the exception being taken. Conversely, it noted that if the defendant had appreciated that the lessee was the statutory “owner”, the exception might not have been pursued, or a notice under Rule 23(1) might have clarified matters and averted the exception.

Balancing these factors, the Court considered the fairest result to be that there should be no order as to costs in both the court a quo and on appeal.

5. Outcome and Relief

The appeal was upheld, and the orders of the court a quo were set aside and replaced with an order that the exception is dismissed, with no order as to costs.

Condonation for late lodging of the power of attorney and appeal record was granted, with the plaintiff ordered to pay the costs of the condonation application.

The plaintiff’s application to amend the particulars of claim was refused, with the plaintiff ordered to pay the costs of the amendment application.

Cases Cited

v Rondalia Assurance Corporation of South Africa Ltd and Others 1976 (4) SA 67 (T)

Mahomed v Nagdee 1952 (1) SA 410 (A)

Durban Corporation v Estate Whitaker 1919 AD 195

Estate Maree v Redelinghuis 1943 AD 547

Argus Printing and Co Ltd v Die Perskorporasie van Suid-Afrika Bpk; Argus Printing and Publishing Co Ltd v Rapport Uitgewers (Edms) Bpk 1975 (4) SA 814 (A)

Aris Enterprises (Finance) (Pty) Ltd v Waterberg Koelkamers (Pty) Ltd 1977 (2) SA 425 (A)

Navidas (Pty) Ltd v Essop; Metha v Essop [1994] ZASCA 84; 1994 (4) SA 141 (A)

Legislation Cited

Multilateral Motor Vehicle Accidents Act 93 of 1989

Statutory Agreement contained in the Schedule to the Multilateral Motor Vehicle Accidents Act 93 of 1989 (including Articles 1, 40 and 52)

Rules of Court Cited

Uniform Rules of Court, Rule 23(1)

Held

The Supreme Court of Appeal held that, because the motor cycle was leased for a period of at least twelve months, the Statutory Agreement’s definition of “owner” applied and the lessee (the employer) was the “owner” for purposes of Articles 40 and 52. Consequently, the plaintiff’s claim against the defendant lessor was not barred by Article 52 on the basis advanced in the exception, and the exception should have been dismissed.

The Court further held that condonation should be granted (with costs against the plaintiff), the amendment application should be refused (with costs against the plaintiff), and that fairness justified no costs order in respect of the exception proceedings and the appeal.

LEGAL PRINCIPLES

The judgment applied the principle that where legislation or a statutory instrument provides a specific definition for a term, that definition governs the meaning of the term within the instrument’s scope, even where the defined meaning differs from the term’s ordinary/common-law meaning. In particular, where the definition provides that a word “means” a specified thing in a given context, the ordinary meaning is displaced rather than supplemented.

In the context of the Statutory Agreement under the Multilateral Motor Vehicle Accidents Act, the judgment applied the principle that the defined term “owner” may denote the lessee (and not the common-law owner) where the vehicle is subject to a lease for a period of at least twelve months, and that this defined meaning controls the application of liability and exclusion provisions that refer to the “owner”, including Articles 40 and 52.

On costs, the judgment applied the principle that costs awards remain discretionary, and that where a party succeeds on a point raised for the first time on appeal (or raised by the appellate court itself), a court may consider what would likely have occurred had the issue been raised earlier, as well as the parties’ respective conduct in pleadings and procedural choices, in determining a just costs order.