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[2023] ZAWCHC 25
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S.J.J.W v Road Accident Fund (19574/2017) [2023] ZAWCHC 25 (8 February 2023)

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IN THE HIGH COURT OF
SOUTH AFRICA
WESTERN CAPE DIVISION,
CAPE TOWN
Case
number: 19574/2017
In
the matter between:
S[...]
J[...] J[...] W[...]
Plaintiff
and
THE
ROAD ACCIDENT FUND
Defendant
REASONS
DELIVERED ON 8 FEBRUARY 2023
VAN
ZYL AJ:
Introduction
1.
On 6 February 2022 I granted an order in
the following terms:
“
1.
The Defendant shall be liable for 100% (One Hundred Percent) of the
Plaintiff’s damages set out in paragraphs 2 and 3 below.
2.
The Defendant shall, by agreement, pay to Plaintiff's attorneys of
record by means of an electronic transfer of funds the sum
of
R
4 273 170.00
(Four
Million Two Hundred and Seventy-Three Thousand One Hundred and
Seventy Rand) which amount is in respect of the Plaintiff’s

Loss of Income and General Damages.
3.
The Defendant shall in addition to the amount referred to in
paragraph 2 above, pay to Plaintiff's attorneys of record by means
of
an electronic transfer of funds the further sum of
R
676 973,17
(Six Hundred and
Seventy Six Thousand Nine Hundred and Seventy Three Rand and
Seventeen Cents) which amount is in respect of the
Plaintiff’s
Past Hospital and Medical Expenses.
4.
The capital amounts referred to in paragraphs 2 and 3 above shall be
paid to Plaintiff's attorneys of record by means of an electronic

transfer of funds, within 180 calendar days from the date of this
order, however, the Defendant will be liable for interest on
the
capital amount at the applicable interest rate as from 14 court days
from date of this order to the date of final payment.
The Plaintiff
shall not proceed with a warrant of execution prior to the expiry of
the aforesaid 180-day period.
5.
Defendant shall provide Plaintiff with an Undertaking in terms of
Section 17(4)(a)
of the
Road Accident Fund Act 56 of 1996
to
compensate him for the costs for his future accommodation in a
hospital or nursing home, the appointment of a case manager or

treatment of or rendering of a service to him or supplying of goods
to him arising out of the injuries sustained by him in the
accident
on 29 July 2016.
6.
Defendant shall pay Plaintiff’s taxed or agreed costs on the
High Court Scale to date hereof, as between party and party,

inclusive of the cost for trial on
2 February 2023 and 6 February
2023, and including but not limited to, the costs as set out
hereunder and which costs are to include:
6.1
The costs incurred by Plaintiff’s attorneys in instituting and
prosecuting this action, as well as all costs attendant
upon the
obtaining of payment of the capital amounts and obtaining the
Undertaking referred to above;
6.2
The taxed or agreed fees, expenses and allowances incurred in
relation to Plaintiff’s experts, which
Rule 36(9)(a)
& (b)
Notices have been filed and all expert reports furnished to the
Defendant by discovery or otherwise, including their
preparation and
qualifying fees and all reasonable and necessary costs attached to
the preparation and procurement of their expert
reports, as well as
other related costs such as X rays, Form 4 (serious assessment),
addendum reports, collateral procurement,
joint minutes,
consultations and travel to consultations and their day fees for the
trial set down on 2 February 2023.
6.3
The Plaintiff’s experts are:
6.3.1
Dr R Jaffe (Orthopaedic Surgeon);
6.3.2
Dr Z Domingo (Neurosurgeon);
6.3.3
Dr J Faure (Urologist);
6.3.4
Dr K Cronwright (Plastic & Reconstructive Surgeon);
6.3.5
Elspeth Burke (Clinical Psychologist);
6.3.6
Nadia Jacobs (Occupational Therapist);
6.3.7
Karen Kotze
(Industrial Psychologist);
6.3.8
Munro Forensic Actuaries (Actuary).
6.4
The taxed or agreed fees of Plaintiff’s Counsel, such costs to
include consultations with the Plaintiff’s Attorney,
the
Plaintiff and expert witnesses, Counsel’s Advice on Quantum,
attendance at any pre-trial conferences as well as his trial

preparation and day fees for 2 February 2023 and 6 February 2023.
6.5
The taxed or agreed fees of the Plaintiff’s attorney for
attending pre-trial hearings and attending to amendments of the

particulars of claim, subject to the discretion of the taxing master.
6.6
T
he Plaintiff shall, in the event that costs are not
agreed, serve the notice of taxation on the Defendant.
7.
The payment of the legal costs shall be payable within 180 (one
hundred and eighty) calendar days following settlement or the
taxing
master’s allocator, in the event of taxing the bill of costs,
whichever is applicable, however, the Defendant will
be liable for
the interest on the cost amount at the applicable interest rate as
from 14 court days of the date of this order to
the date of final
payment. The Plaintiff shall not proceed with a warrant of execution
prior to the expiry of the aforesaid 180-day
period.
8.
Payment of the amounts reflected in paragraphs 2, 3 and 6 above shall
be effected directly to Plaintiff’s attorneys of
record by
means of an electronic transfer into the trust account mentioned
below.
9.
It is recorded that there is a valid Contingency Fee Agreement herein
between the Plaintiff and DSC Attorneys, and there has
been
compliance with all relevant provisions of the
Contingency Fees Act
No. 66 of 1997
.
10.
Plaintiff’s attorney's trust banking account details are as
follows:- …
”
2.
The reasons for the grant of the order are
set out below.
The
plaintiff’s claim
3.
On 29 July 2016, the plaintiff was a
passenger in a motor vehicle that collided with an insured driver as
contemplated in
section 17(1)
the
Road Accident Fund Act 56 of
1996
(“the Act”).  As a result of the collision, the
vehicle in which the plaintiff was travelling left the roadway
and
rolled.
4.
The plaintiff sustained serious bodily
injuries as a result of the collision.  They are set out in the
particulars of claim
as well as in the expert reports filed of record
for the purposes of this action.  It is not necessary to detail
the injuries
as, prior to the hearing of the action, the parties
settled the question of liability.  It was agreed, first, that
the defendant
was liable for 100% of the plaintiff’s proven
damages and, second, that the plaintiff’s injuries were serious
as contemplated
in
section 17(1)
read with
section 17(1A)
of the Act
in respect of claims for general damages (“non-pecuniary”
damages).
5.
What remained was the issue of
quantum
.
The plaintiff claims damages in respect of past medical and hospital
expenses, future medical and related expenses, estimated
past and
future loss of earnings, alternatively, past and future loss of
earning capacity, and general damages for pain and suffering
and loss
of the amenities of life.
6.
Prior to the hearing of the matter, the
parties reached an agreement in relation to all of the damages except
for the past medical
and hospital expenses. The hearing therefore
continued only in respect of those damages.
Events
at the hearing
7.
The plaintiff’s claim in relation to
past hospital and medical expenses comprised expenses that he had
himself incurred, as
well as expenses incurred by his contracted
medical aid scheme, Momentum.
8.
At the commencement of the hearing, counsel
for the plaintiff indicated that a directive had been issued by the
defendant’s
chief executive officer in August 2022 to the
effect that the defendant would no longer reimburse the expenses paid
by a medical
aid scheme on a plaintiff’s behalf.  That was
the basis for the defendant’s refusal to settle those expenses
with
the plaintiff.
9.
Prior to the leading of evidence, the
defendant indicated that it had queries in relation to some of the
expenses incurred by Momentum.
The defendant later informed the
Court that those issues had been resolved and that it was no longer
necessary to hear evidence
relating to those expenses.  The
total amount of expenses paid by Momentum is about R581 079,00.
10.
The plaintiff gave evidence regarding the
expenses that he himself had incurred.  He confirmed that those
expenses were incurred
as a result of the injuries sustained in the
collision.  They related mainly to the payment of one months’
rental for
accommodation with a lift as opposed to stairs (the
plaintiff had difficulty walking) and to medication for the relief of
pain
in his neck and head.  The plaintiff used the services of a
biokineticist at a Virgin Active gym because the service was less

costly than going to a private practice.  He received treatment
for the nerve damage in his fingers, as well as stretch exercises
for
his neck and back.  He also consulted a specialist in relation
to a procedure to be done for the purposes of pain relief.
11.
The plaintiff’s evidence was not
seriously disputed in cross-examination – correctly so.
There is no reason to
doubt that the costs had been incurred as a
result of the collision and its
sequelae
,
and that it was necessary to incur them.  The plaintiff,
moreover, was careful to save costs wherever possible.  The

defendant did not lead any evidence to the contrary.  The
defendant in fact subsequently agreed that it would be liable for
the
costs incurred by the plaintiff in the sum of about R95 893,00.
The
payments by Momentum
12.
At the close of the evidence, therefore,
the only issue that remained was whether the defendant should be
ordered to pay the costs
incurred on the plaintiff’s behalf by
Momentum, given the directive of August 2022.  The directive
reads as follows:
“
Dear
colleagues
All
Regional Managers
must
ensure that their teams implement the
attached
process to assess claims for past medical expenses.
All
RAF offices are required to assess claims for past medical expenses
and
rejec
t
the medical expenses claimed if the
Medical
Aid has already paid
for
the
medical
expenses
.
The regions must use the prepared
template
rejection letter
(
see
attached
) to communicate the
rejection. The reason to be provided for the repudiation will be that
the claimant has sustained no loss or
incurred any expenses relating
to the past medical expenses claimed. Therefore, there is no duty on
the RAF to reimburse the claimant.
Also
attached
is
a
list of Medical
Schemes
.
Required
outcome: immediate implementation of the process and 100% compliance
to the process
.”
[The
defendant’s own emphasis.]
13.
The directive was the subject of an
application for judicial review in the South Gauteng Division of the
High Court in
Discovery Health (Pty) Ltd
v Road Accident Fund and another
ZAGPPHC 368 (26 October 2022).  The Court held that the
directive was unlawful, and it was set aside on that basis.
A
subsequent application for leave to appeal by the defendant was
refused on 23 January 2023.
14.
The defendant’s counsel urged this
Court to suspend an order in relation to this aspect of the
plaintiff’s claim
sine die
,
pending the institution of an application for leave to appeal to the
Supreme Court of Appeal.  She indicated, further, that
the
defendant was intent upon testing the matter in the Constitutional
Court, if necessary.
15.
It is common cause that no application has
as yet been lodged at the Supreme Court of Appeal.  Counsel
could not say when it
would be done, save to assume that the
defendant would follow the prescribed time periods for the launch of
such proceedings.
She mentioned further, however, that various
of the persons involved in the process were ill or injured, and that
it was difficult
to obtain coherent instructions.
16.
Section 17(1)
of the Act obliges the
defendant to compensate third parties such as the plaintiff for any
loss of damage suffered as a result
of the negligent or wrongful
conduct of the driver of a motor vehicle.  The Constitutional
Court explained the position as
follows in
Law
Society of South Africa v Minister of Transport
2011 (1) SA 400
(CC) at para [25]: “…
the
scheme insures road users against the risk of personal injury
and their dependants against the risk of their death caused
by the
fault of another driver or motorist. It has retained the underlying
common-law fault-based liability. This means that any
accident victim
or a third party who seeks to recover compensation must establish the
normal delictual elements. The claimant must
show that he or she has
suffered loss or damage as a result of personal bodily injury or
the injury or death of a breadwinner
arising from the driving of a
motor vehicle in a manner which was wrongful and coupled with
negligence or intent
.”
17.
It is a well-established principle of our law that the
patrimonial damages for which the Road Accident Fund is liable
(subject to
certain express exclusion and limitations not relevant to
the current matter) is calculated on an ordinary delictual basis. The

Supreme Court of Appeal in
Erasmus
Ferreira &
Ackerman v
Francis
2010 (2) SA 228
(SCA)
restated the principle as follows in para [16]: “
As
a
general
rule
the
patrimonial
delictual
damages
suffered
by
a
plaintiff
is
the
difference
between
his
patrimony
before
and
after
the
commission of
the
depict.
In determining
a
plaintiff's
patrimony
after
the
commission
of the delict
advantageous
consequences
have to
be taken
into
account.
But
it has
been
recognized
that
there
are
exceptions
to
this
general
rule
."
18.
By way of an introduction to the discussion below, I refer to what
the Court stated in
Erasmus Ferreira
at para [15], namely that
"
according to
the principle res inter alios acta, aliis neque
nocet, neque prodest ('a thing done, or a
transaction
entered into, between certain parties cannot advantage or injure
those who are not parties to the act or transaction'),
and had to be
disregarded in computing the plaintiff's damages.
”
.
19.
The Courts have, on many occasions, held
that medical aid scheme benefits are a form of indemnity insurance
and should accordingly
be disregarded for the purposes of an award
for damages, in accordance with the principle of
res
inter alios acta
.  A number of
these authorities were usefully set out in the matter of
Lawson
v The Road Accident Fund
(unreported
judgment of this Court under case number 12399/2017, delivered on 15
December 2022).
20.
In
Zysset and others
v Santam Limited
1996 (1) SA 273
(C) at
278C-D the Court explained that “
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
incoming t the assistance of the plaintiff.
21.
In
Thomson v Thomson
2002 (5) SA 541
(W) at 547H-I the Court
stated as follows: “
A
medical aid scheme is, if not in law then in substance, a form of
insurance. One pays a premium against which there may be
no
claim, or claims less than the value of the premiums, or claims which
far exceed the value of the premiums. Were this a claim
for damages,
whether in delict or in contract, there is little doubt that the
defendant would not have been entitled to rely on
the payments
received from the medical aid scheme
.”
22.
The Court in
D’Ambrosi v Bane and others
2006 (5) SA 121
(C) reiterated the principle at para [45]: “
…
at
the time he suffered such injuries, the plaintiff was, and still
is, a member of a medical aid scheme, which has, in fact,
raised his
premiums in return for all-embracing cover. He has not received, nor
is it envisaged that he will, in future, receive
any benevolent or ex
gratia payments from such scheme. There is hence no question
that any payments made to him by the
scheme are in the nature of
deductible social insurance benefits. I am in respectful agreement
with Gautschi AJ in the Thomson case
… that a
medical aid scheme, such as that of which the plaintiff is a member,
is, in substance, a form of insurance. In
my view, it is no different
from any other form of indemnity insurance which offers cover against
injury or damage in return for
premium payments.
”
23.
The decision was confirmed on appeal in
Bane v D’Ambrosi
2010 (2) SA 539
(SCA).
24.
In the specific sphere of Road Accident Fund litigation, the
principle has consistently been upheld.  In
Rayi NO v Road
Accident Fund
[2010] ZAWCHC 30
(22 February 2010) this Court
discussed the relevant principles and held at para [17] that the
“
undertaking
given by the plaintiff to Bonitas creates a contingent liability
which is enforceable on the happening of some future
event. Bonitas'
right of recourse against the plaintiff for reimbursement does not
arise until the plaintiff has received payment
from the defendant.
The defendant's liability to the plaintiff for the payment of the
past medical expenses is not affected by
Bonitas’ payment on
behalf of the plaintiff
.”
25.
In
Mooideen v The Road Accident Fund
(unreported judgment
under case number 17737/2015, delivered on 11 December 2020) this
Court, again, and after setting out the
relevant legal basis,
confirmed that “…
the settlement by Discovery of the
deceased’s past medical expenses, did not relieve the defendant
of any of its legal obligations
to compensate the plaintiff in her
representative capacity for the past medical expenses which the
deceased incurred. Discovery’s
payment of these expenses was,
therefore, an irrelevant collateral transaction with respect of the
defendant when dealing with
a claim by the deceased estate against
the defendant. The defendant is not entitled to raise Discovery’
medical aid scheme
indemnification as a defence and therefore benefit
from the payment
.”
26.
The Court proceeded that “
Plaintiff thus, on behalf of the
deceased's estate, in terms of the rules which I have said out of
Discovery and the common law
of insurance, can recover from the
defendant as if there had been no indemnification at all. The
recovery made by the deceased
estate is a matter between the
plaintiff and Discovery and has, therefore, raised res inter alios
acta.
”
27.
These sentiments were reiterated in the
Discovery Health
case
referred to above.  The Court emphasised in para [16] that the
purpose of the Act was aptly described in
Engelbrecht v Road
Accident Fund and another
2007 (6) SA 96
(CC) at para [23] as
primarily to give the maximum protection to persons who suffer loss
or damage as a result of the negligent
driving or unlawful conduct in
the driving of a motor vehicle.
28.
On a consideration of the authorities set out above, as well as on a
proper interpretation of the various relevant provisions
of the Act,
the Court concluded at para [29] that the Road Accident Fund was not
entitled to seek to free itself of the obligation
to pay full
compensation to victims of motor vehicle accidents.  The August
2022 directive was therefore outside of the authority
given by the
enabling statute.  It was inconsistent with the express
provisions of
section 17
of the Act, and thus unlawful.  The
Court elaborated:
“
[30]
The social security protection
the RAF Act provides is in no way intended to impoverish medical
schemes who, were the directive
to stand, would face a one direction
downward business trajectory as a result of their members becoming
victims of motor vehicle
accidents.
The levy paid on fuel provides the funds for payment of compensation
to motor vehicle accident victims and nothing in the law obliges

medical aid schemes to contribute towards such compensation by the
payment, from the time of hospitalisation and treatment of a
motor
vehicle accident victim, of medical expenses without a reasonable
expectation of reimbursement upon settlement of the claimants’

claims in terms of the RAF Act.
[31]
It is for that expectation
that medical schemes enter into agreements with their members and
provide relevant invoices of medical
expenses incurred to be
considered in the calculation of the claimants’ claims.
Settlements of victims’ claim is in
full and final settlement.
This means that, unless the past medical expenses form part or are
included in the settlement amount,
medical aid schemes will not be
reimbursed for the medical expenses they paid. Worst still, medical
schemes would have no standing
to recover those expenses due to the
claimant’s claims having been settled in full and final
settlement
.
[32]
The only way to prevent their loss of expenses incurred for the
medical treatment of their client victims of motor vehicle
accidents,
would be for the medical schemes to institutes concurrent claims
against the RAF and in due course seek the consolidation
of the
hearing of the two matters. The costs of the proceedings will be
astronomical and unnecessarily incurred by the RAF which,
in terms of
the Public Finance Management Act, will constitute wasteful
expenditure
.” [Emphasis
added.]
29.
As mentioned, an application for leave to appeal against the judgment
has been refused, and no further steps have been taken
by the
defendant.
Conclusion
30.
Counsel for the plaintiff contended that, in the light of these
decisions, the Court in the present matter had to find that
the
defendant liable to compensate the plaintiff for past medical
expenses paid by Momentum. I agree with his submissions.
As the
law stands at present, the defendant’s liability to a claim for
past medical expenses is not affected by the fact
that the
plaintiff’s medical aid has already paid those expenses.
It is clear from the decisions referred to above
(in particular those
of this Court, in respect of which I cannot find any basis to
conclude that they were clearly wrong), that
the
res inter alios
acta
principle does not permit the defendant to deduct the
amounts paid by Momentum from the
quantum
payable to the
plaintiff in respect of past medical expenses.
31.
In these circumstances, there is no reason for this Court to keep the
finalisation of this matter in abeyance for an indefinite
period
while the defendant gets its house in order.  Should the
defendant launch an application for the rescission of this
judgment,
given the defendant’s intentions to pursue litigation up to the
Constitutional Court in seeking finality on the
issue of the payment
of medical aid costs, such rescission application would have to be
dealt on its own merits in due course.
Counsel for the
defendant was not able to inform the Court as to what the basis for
rescission would be, but that is an issue that
this Court is not
concerned with at present.
Costs
32.
The costs awarded in the action are set out in the order
granted.
P. S. VAN ZYL
Acting
judge of the High Court
Appearances:
For
the plaintiff
:
W. Coughlin, instructed by DSC
Attorneys
For
the defendant
:
S. Maduray, instructed by the Road Accident Fund