IN THE HIGH COURT OF SOUTH AFRICA GAUTENG LOCAL DIVISION, JOHANNESBURG

Transcription

1 IN THE HIGH COURT OF SOUTH AFRICA GAUTENG LOCAL DIVISION, JOHANNESBURG CASE NO: 2014/12763 DELETE WHICHEVER IS NOT APPLICABLE (1) REPORTABLE: YES/NO (2) OF INTEREST TO OTHER JUDGES: YES/NO (3) REVISED DATE SIGNATURE In the matter between: CYNTHIA MARIE VAN DER WALT Plaintiff And ROAD ACCIDENT FUND Defendant JUDGMENT MOJAPELO DJP: Introduction [1] The question that arises in this case is whether an undertaking in terms of section 17(4) (a) of the Road Accident Fund Act (Act 56 of 1996) which the Road Accident Fund ( the Fund ) may furnish for future medical expenses constitutes specific performance which a Magistrates Court may not grant by virtue of the limitation to its jurisdiction by section 46(2) of the Magistrates Courts Act 32 of 1944.

2 [2] The issue has arisen within the context of the scale of costs which the plaintiff seeks for the action. 2 Background [3] The plaintiff instituted a claim in the High Court against the Fund arising from a collision in which the plaintiff sustained injuries. The plaintiff claimed, in the summons which she issued: 3.1 R in respect of past medical and hospital expenses; 3.2 An Undertaking in terms of section 17(4) (a) of the Road Accident Fund Act 56 of 1996 (the RAF Act ); 3.3 R in respect of general damages; and 3.4 Costs of suit. [4] The action was set down for trial on 11 May During trial roll call on 11 May 2015 the defendant offered the plaintiff the relief sought in paragraphs 3.1 and 3.2 above, as well as costs on the Magistrates Court scale for the claim in respect of paragraph 3.4 above. The parties accept that the plaintiff is not entitled to general damages as she has not submitted a serious injuries assessment report under the Road Accident Fund Amendment Act, 19 of The plaintiff accepted the defendant s offer in terms of 3.1 and 3.2 above, that is, for past medical expenses and for an Undertaking in terms of section 17(4)(a) of the RAF Act. The plaintiff, however, refused to accept costs on the Magistrate s Court scale for claim 3.4 contending that she was entitled to costs on the High Court scale. The Issue and Contentions

3 3 [5] As the parties have not settled costs, that question has been left to be determined by this court. The defendant concedes that it is obliged to pay the plaintiff s costs in as much as the plaintiff is partially successful in the claim. It, however, contends that this court should award costs on the Magistrates Court scale in as much as the plaintiff s claim could and should have been instituted within the Magistrates Court and concluded there. The monetary value of the plaintiff s claim indeed falls within the jurisdiction of the Magistrates Court, as I set out later in this judgment. 1 [6] The plaintiff s contention is that irrespective of the fact that the value of the foreseeable or unforeseeable future medical treatment falls within the jurisdiction of the Magistrates Court, an Undertaking in terms of section 17(4) (a) of the RAF Act constitutes a claim for specific performance without an alternative of payment of damages, which the Magistrate s Court is incompetent to make in terms of section 46(2) (c) of the Magistrates Courts Act 32 of She insists on the High Court scale of costs and argues that her claim for an undertaking, under prayer 3.2, cannot be adjudged in the Magistrates Court as it is not competent to issue such an order. [7] The issue thus turns on whether a claim for the Undertaking in terms of section 17(4) (a) of the RAF Act constitutes a claim for specific performance without an alternative for payment of damages, within the meaning of section 46(2) (c) of the Magistrates Courts Act. By formulating its claim in respect of future medical expenses as a claim for the Undertaking and not, as it is commonly done, as a claim for payment of damages, the plaintiff has placed that issue squarely before this court. If the plaintiff is right, a high number of Undertakings, which the magistrates issue regularly, are not valid. [8] Section 46 of the Magistrates Courts Act deals with matters which are beyond the jurisdiction of the Magistrates Court. Section 46(2)(c) provides that: 1 See paragraph [23] of this judgment.

4 4 (2) A court shall have no jurisdiction in matters: (c) in which is sought specific performance without an alternative of payment of damages except in (i) the rendering of an account in respect of which the claim does not exceed the amount determined by the Minister from time to time by notice in the Gazette; (ii) the delivery or transfer of property, movable or immovable, not exceeding in value the amount determined by the Minister from time to time by notice in the Gazette; and (iii) the delivery or transfer of property, movable or immovable, exceeding in value the amount determined by the Minister from time to time by notice in the Gazette, where the consent of the parties has been obtained in terms of section 45. [9] Section 17(4)(a) of the RAF Act states the following: (4) Where a claim for compensation under subsection (1) (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 of goods to him or her, the Fund or an agent shall be entitled, after furnishing the third party concerned with an undertaking to that effect or a competent court has directed the Fund or the agent to furnish such undertaking, to compensate (i) the third party in respect of the said costs after the costs have been incurred and on proof thereof; or (ii) the provider of such service or treatment directly, notwithstanding section 19(c) or (d), in accordance with the tariff contemplated in subsection (4B). [10] The issue is the scale of costs. The contentions of the parties, as argued before court, turn on the interpretation of section 46(2) (c) of the Magistrates Court and section 17(4) (a) of the RAF Act. Specific Performance under Sec 46(2) (c) [11] Counsel for the defendant approaches the matter by first seeking an interpretation of specific performance under the section in the Magistrates Court as interpreted through case law 2 and legal writers 3 2 Maisel v Chamberleigh Court (Pty) Ltd 1953 (4) SA 371 (C) at 379H; Oliver v Stoop 1978 (1) SA 196 T at C D; Malkiewicz v Van Niekerk and Farouclas Investments CC (2008) 1 All SA 57 (T) at 60; Badenhorst v Theophanous 1988 (1) SA 793 (C) at 796B.

5 5 and reaches a conclusion that the section refers to specific performance of a contractual obligation. She argues further that as the plaintiff s claim against the defendant arises out of a statute (and not contract), the claim for the issuing of a section 17(4) (a) Undertaking is not one for specific performance as contemplated in section 46(2) (c) of the Magistrates Courts Act. That restriction, she argues, applies only to specific performance under a contractual obligation. In his supplementary heads of argument, counsel for the plaintiff, also refers to his own chosen case law 4 and contends that specific performance in this context is not confined to the performance of a contractual obligation, and that it includes specific performance of an obligation under a statute, delict or any other obligation. This court is aware of the fact that interpretation of the words specific performance and specific performance of an act in the current Magistrates Courts Act and its predecessors respectively, has given rise to divergent views and even conflicting decisions. 5 If it were necessary, this court would examine the relevant case law to reach conclusion on its own interpretation for the purposes of this case. I am, however, of the view that the examination of the subsection and the divergent views and decisions it produced, in the context of this case, constitutes a diversion from the real and core issue, which rest on the nature of the Undertaking under section 17(4)(a) of the RAF Act. I examine this below. Nature of Section 17(4) (a) Undertaking [12] The liability of the Fund to a third party (the injured) is to compensate her for loss or damage. 6 The liability is created by an obligation imposed on the Fund under section 17(1). In respect of future medical expenses, the claimant can thus only claim for loss or damages. Prior to the introduction 3 See R H Christie, The Law of Contract in South Africa, 6 th Edition, p ; Jones & Buckle, Practice of Magistrates Courts in South Africa, Vol 1. 4 Especially Sydney Clow & Co Ltd v Herzberg 1938 TPD 201; Zinman v Miller 1956 (3) SA 8 (T); See also Oliver v Stoop 1978 (1) SA 196 T and Malkiewicz v Van Niekerk [2008] 1 All SA 58 (T) at Jones & Buckle The Civil Practice in the Magistrates Courts in South Africa 10 th Edition Volume 1 The Act, at Section 17(1)(b) of the RAF Act.

6 6 of the Undertaking, a court hearing an action for such loss or damages, had to apply the once and all principle. This obliged the court to award there and then and consequently to assess and quantify, in one and the same proceedings any claim proved to have been suffered by the 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 assessing either too much or too little. Yet nothing could be left over to see how things turned out. Then came section 21(1C) of the Compulsory Motor Vehicle Insurance Act 56 of 1972 (the predecessor to the present sec 17(4) (a) of the RAF Act). Its purpose was to take guesswork out of the assessment of damages of this kind. Under section 17(4) (a) damages are paid as damages eventuated. Section 17(4) (a) and its predecessors must be interpreted against this background. Its purpose is to solve the quantification problem, nothing more. 7 [13] From the wording of the section, 8 the Undertaking may be issued where a claim for compensation from the Fund includes a claim for costs for future accommodation in a hospital or nursing home, or costs of treatment or of rendering a service or costs of supplying goods to the injured arising from injuries. The claim therefore is essentially one for costs. It is a claim for payment and not for performance of an obligation. That is the claim which a claimant must make. It is only when the claim is made, that the Fund or an authorised agent is entitled to furnish an Undertaking. The right to furnish the Undertaking is specifically given to the Fund. The furnishing of the Undertaking is not an obligation placed on the Fund but a right given to the Fund. The Act also does not create a right for the injured plaintiff to claim the Undertaking. The claimant can therefore not claim, as of right, that the Fund should furnish an Undertaking. Only the Fund may make the election either to pay the costs claimed (which is generally referred to as future medical expenses ) or to furnish an Undertaking in lieu of payment. A priori, the 7 See Road Accident Fund v Arendse 2003 (2) SA 490 (SCA) paragraphs [8] and [9]. 8 Section 17(4)(a) of the RAF Act.

7 court may not order it, unless it is tendered. There is no obligation to furnish an undertaking unless it has been tendered. 7 [14] The aforegoing appear clear from the reading of the Appellate Division (now the Supreme Court of Appeal) decision in Marine & Trade Insurance Co Ltd v Katz NO 9, when dealing with the Compulsory Motor Vehicle Insurance Act 56 of The Court pronounced on the nature of an Undertaking contained in the then section 21(1C) (a) thereof, which wording is almost identical to section 17(4) (a) of the RAF Act. [15] Explaining the purpose of the provision, Trollip JA stated 10 that: The purpose of the provision was to innovate a departure from the common law. This was mainly for the benefit of authorized insurers. I pause to mention that under the present Act, the RAF Act, the Fund now occupies the position of the authorised insurers. [16] The learned Judge of Appeal continues: 11 [It] is designed for the benefit of authorized insurers and has the effect, if invoked, of eliminating the uncertainties and imponderables inherent in having to adjudicate once and for all the quantum for the future loss or damage mentioned therein. Its provisions, however, only apply if the insurer concerned elects to invoke them. The emphasis here is that the provision in the Act for the furnishing of an Undertaking to meet a claim for future medical expenses (instead of meeting it with a cash payment), is designed for the Fund, and applies only if the Fund elects to invoke it. Unless the Fund so elects, the court cannot direct the Fund to give an Undertaking. This appears further when the Court states: (4) SA 961 (A) 10 At 970C 11 At 970G H 12 At 971H

8 8 As has already been pointed out, the trial Court must direct the insurer to furnish such an undertaking if the insurer so elects, and it cannot direct the insurer to do so if no such election is made. The trial Court has no discretion to direct or withhold it. And, in either event, the claimant has no say at all in the matter. (my emphasis) [17] More importantly, the Court states: 13 : That flows from the words the authorized insurer shall be entitled etc The claimant (the third party) cannot himself claim or insist that the insurer shall furnish the undertaking, nor can the trial Court mero motu direct the insurer to furnish it. For the election lies entirely with the insurer. (my emphasis) [18] These words clearly dispose of the question in this case completely. It is not competent for the claimant to formulate its claim for future medical expenses as a claim for the Undertaking. She cannot claim or insist that the Fund shall furnish an Undertaking. Her claim is for future medical expenses and the right is that of the defendant, if it so wishes, to invoke the Undertaking. [19] What the claimant did, in formulating that part of her claim or prayer (prayer 2) as a claim for the furnishing of an Undertaking and then seeking to characterise it as a claim for specific performance, is not permissible. It is significant that counsel for the plaintiff, who, in his heads of argument quoted extensively from Marine & Trade 14 starting from the page on which the answer to the problem appears, conveniently skipped the decisive words The claimant cannot himself claim or insist that the insurer shall furnish an undertaking. Those words appear in the law report immediately at the end of the words quoted by counsel. It makes matters worse for the plaintiff s counsel that during argument this court specifically asked him the question whether the claimant was entitled to 13 At 970H 14 In particular from p 970C D and p 970G H

9 9 claim an undertaking in the manner the plaintiff did. That question should have directed counsel to the answer in paragraph [17] above. The direct answer was against his course and it is fair to conclude that he avoided or evaded it. [20] The answer to the question is clear, the plaintiff (the injured) cannot himself or herself claim the Undertaking, as she did. The court can also not order it unless the defendant tenders it. Strictly speaking the defendant could object or except to the formulation as improper. However, given its practice, it is unlikely to do so. Nevertheless, even where the plaintiff formulated the claim as one for the Undertaking under section 17(4) (a), the true nature of the claim remains one for future medical expenses and which the defendant may, at its sole and exclusive election, meet, as it often does, with the tendering of an Undertaking, which the plaintiff must accept or the court may then order. It is certainly not a claim for specific performance without the alternative of payment of damages which is beyond the jurisdiction of the Magistrates Court. The Magistrates Court thus has full jurisdiction to adjudicate such a claim as long as it is not otherwise excluded from its jurisdiction, e.g. by virtue of the high value of the total claim. [21] I asked counsel further whether, assuming that the claimant could formulate its claim as one for an Undertaking from the Fund, whether the claim would not inherently remain a claim with an alternative for payment of damages, in the sense that the Fund would still have the election to pay future damages in cash. The answer was a further avoidance as counsel stated that the question was an oxymoron in as much as the Fund, as a matter of practice, did not pay cash for future medical expenses. The question of the court clearly referred to the nature of the claim, namely, whether such was a claim for specific performance simpliciter (i.e. to furnish the statutory Undertaking) or whether such a claim (assuming it was so framed) was not inherently a claim for specific performance with (and not without) an alternative of payment of damages (which would clearly not be excluded from the Magistrates Court

10 10 jurisdiction. In this context the oxymoron answer was further pertinent avoidance of the issue for which an answer is clearly there on the page from which the quotation by counsel had come. [22] The plaintiff s claim in this matter is therefore fully justiciable in the Magistrates Court and should have been instituted in that court. This is, despite the formulation of prayer 2 in the Particulars of Claim, as if it were for specific performance. [23] The plaintiff effectively proved that she was entitled to an amount of R in respect of past medical expenses (as settled) and a possible amount of R in respect of future medical expenses, as per the report of the plaintiff s orthopaedic surgeon, Dr Barlin. The plaintiff s occupational therapist, Romy Marks, suggested a possible amount of approximately R in respect of assistive devices. The plaintiff could thus only be able to prove a total claim in the amount of R inclusive of the value of the Undertaking, which does not exceed the District Magistrate s Court jurisdictional limit of R Hers is only a possible claim in respect of future medical expenses, because under section 17(4)(a) of the RAF Act, any payment in respect of future medical treatment will only be made after such costs have been incurred and on proof thereof. The plaintiff s claim is, in its totality, in value approximately 25% of the jurisdiction limit of the Magistrate District Court. It is a claim which should never have been instituted in the High Court. [24] The formulation of a claim for future medical expenses as a claim for an Undertaking, as the plaintiff did in this case, is potentially confusing, especially in the Magistrates Court, and is strongly discouraged. It confuses and obfuscates the true nature of the claim, as the plaintiff s claim in this case did. This court hopes that this was an isolated case. [25] The plaintiff is only entitled to costs on the Magistrate District Court scale. To allow anything above that would encourage what is essentially a

11 11 practice which this court deprecates. The engagement of the services of an industrial psychologist, Ms Sugreen, was not justified and the costs shall not be recoverable. [26] In the result, I grant the following order for the plaintiff against the defendant: a. Payment of R in respect of past medical and hospital expenses; b. An Undertaking in terms of section 17(4)(a) of the Road Accident Fund Act 56 of 1996; c. Costs of suit up to 11 May 2015, excluding the costs of and for engaging the services of the plaintiff s industrial psychologist, Ms Sugreen. P. M. MOJAPELO DEPUTY JUDGE PRESIDENT HIGH COURT OF SOUTH AFRICA GAUTENG LOCAL DIVISION Counsel for the Plaintiff: Adv M. M. Suttner Counsel for the Defendant: Adv J. L. Khan Attorney for the Plaintiff: Attorney for the Defendant: Argument took place on: 15 May 2015 Judgment handed down on: 20 May 2015

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