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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NUMBER: 27822/2013

In the matter between:

TSHABALALA, SIBONGILE JOHANNA                                                         PLAINTIFF

and

ROAD ACCIDENT FUND                                                                           DEFENDANT

JUDGMENT

CHAITRAM AJ:

INTRODUCTION:

[1] This action calls for an interpretation of the provisions of Sections 2(1)(a) and 2(1)(e) of the Road Accident Fund (Transitional Provisions) Act 15 of 2012 in relation to a plea of prescription. 

[2] The plaintiff had initially sued for damages in the magistrates court due to the limitation of the defendant’s liability in terms of Section 18(1)(b) of the Road Accident Fund Act, 56 of 1996, but, as a result of the limitation having subsequently been declared unconstitutional, the plaintiff had later instituted this new action in the High Court, purportedly within the context of Sections 2(1)(a) and 2(1)(e) of the Road Accident Fund (Transitional Provisions) Act 15 of 2012, without first having withdrawn her action in the magistrates court.  The plaintiff’s claim in this court was met with a plea of prescription, and I, accordingly, have to decide whether the plea is merited.   

THE FACTS:

[3] The key facts, which are substantially common cause, are the following:

[3.1]        The plaintiff was injured in a motor vehicle accident on 20 October 2006 when the driver of the minibus taxi, in which she was travelling as a fare-paying passenger, lost control of the taxi, which caused it to veer off the road and roll.  No other motor vehicles were involved in the accident. 

[3.2]        At that stage the plaintiff’s claim for compensation against the Road Accident Fund was limited to a total amount of twenty five thousand Rand (R25 000-00) in terms of Section 18(1)(b) of the Road Accident Fund Act 56 of 1996 (the old Act).

[3.3]        Before the plaintiff’s proposed claim would be finally addressed, however, two momentous developments occurred in this area of the law which impacted on the plaintiff’s claim significantly.

[3.4]        First, the old Act was significantly amended by the provisions of the Road Accident Fund Amendment Act 19 of 2005 (the RAFA Act), which, among various other innovations, removed the limitation that had been placed by Section 18(1)(b) for the recovery of compensation by a person in the plaintiff’s position.  As a result, all victims of road accidents who were injured would be compensated on a uniform basis, namely for ‘serious’ injuries, and for certain other ancillary heads of damages, the details of which are not relevant for present purposes.  Appropriate Regulations were simultaneously promulgated which provided the procedural framework to give effect to the assessment of ‘serious’ injuries.  

[3.5]        The RAFA Act, however, did not apply retrospectively with the commencement date of the old Act, but came into effect only on 01 August 2008.  The overall nature and extent of the changes that were introduced by this amendment Act were such that it became colloquially referred-to in the legal profession as “the new Act”.  All references to the new Act in this judgment will, accordingly, be a reference to the Road Accident Fund Act 56 of 1996 as it read with effect from 01 August 2008.  The old Act is, accordingly, a reference to the same Act as it read prior to 01 August 2008.

[3.6]        The effect of this change in the law was not significant enough for the plaintiff at that stage as her cause of action had arisen on 20 October 2006 and remained regulated by the old Act, in other words her claim remained limited to a maximum of R25 0000-00.  The significance of the amendment would only affect her later, which I will return to.     

[3.7]        The plaintiff had, accordingly, resigned herself to her fate and duly instituted her action for her compensation of R25 000-00 in the Pretoria magistrates court on 03 July 2009.  This was well within the applicable prescriptive period of the old Act.

[3.8]        The plaintiff’s action in the magistrates court followed its usual course and pleadings eventually closed.  However, before her action came to trial, the second of the two momentous developments in this area of the law occurred.  

[3.9]        On 17 February 2011 the Constitutional Court declared the provisions of Section 18(1)(b), among other provisions of the old Act, to be unconstitutional in the now famous case of Mvumvu and Others v Minister of Transport and Another 2011(2) SA 473 CC.  The Constitutional Court held, among other grounds, that by limiting an accident victim’s claim for compensation to a maximum of R25 000-00, regardless of the true extent of his/her loss, Section 18(1)(b) unfairly discriminated, albeit indirectly, against mainly black people as this was the category of people who were overwhelmingly affected by that provision.

[3.10]     The Constitutional Court, accordingly, declared Section 18(1)(b), among others, of the old Act, to be invalid, but suspended the declaration of invalidity and allowed Parliament a period of eighteen months, which was subsequently extended for a further six months, to rectify the legal position in the light of the court’s judgment, failing which the order of invalidity would operate from the inception of the old Act until the date that the offending provisions had been repealed by the new Act. 

[3.11]     The Constitutional Court’s decision, logically, was not made applicable to actions in terms of the old Act that had already been properly finalised.  As the plaintiff’s action was still pending, the Constitutional Court’s judgment had a major positive impact on her claim as it meant that her claim was no longer limited in terms of the offending Section 18(1)(b) of the old Act. 

[3.12]     It was then up to Parliament to consider a legislative framework that adequately addressed these categories of pending claims and claims still to be instituted in terms of the old Act in the light of the Constitutional Court’s judgment.  As may have been expected, the vast majority of such claims that had been pending throughout the country at that time, including that of the plaintiff, were held in abeyance pending Parliament’s response to the mini-crisis that it faced in attempting to balance a victim’s entitlement to fair compensation, on the one hand, and the financial sustainability of the Road Accident Fund, on the other. 

[3.13]     Parliament’s response eventually arrived in the form of the Road Accident Fund (Transitional Provisions) Act 15 of 2012 (the Transitional Act) which took effect on 13 February 2013. 

[3.14]     The long title of the Transitional Act identifies its purpose as:

‘To provide for transitional measures in respect of certain categories of third parties whose claims were limited under the Road Accident Fund Act, 1996…prior to 01 August 2008; and to provide for matters connected therewith’.

[3.15]     The following are the salient features of the Transitional Act in relation to the present matter.

[3.16]     The “new Act” and the “old Act” are defined as I have expressed them earlier in this judgment;

[3.17]     The term “third party” is defined as ‘a person who has a right to claim compensation from the fund in terms of Section 17 of the old Act, whose claim is subject to the limitations imposed by Section 18(1) or 18(2) of that Act, and whose claim has, upon this Act taking effect, not prescribed or been finally determined by settlement or judgment’.  The plaintiff in the present matter, accordingly, qualifies as a third party in accordance with this definition.

[3.18]     Section 2(1) of the Transitional Act offers third parties, as defined, the option of having their claim remain subject to the provisions of the old Act, or be subject to the provisions of the new Act.  The reason for offering third parties such a choice is that there are certain advantages and disadvantages associated with the consequences of such a choice, the details of which are not necessary to go into here.  It is the third party who had to commit to a choice after assessing which option would suit him/her better.     

[3.19]     It was in this respect that the new Act was significant for the plaintiff.  She elected to have her claim subject to the provisions of the new Act.  As such, the Transitional Act created a transitional regime in terms of which she had to submit to a ‘serious injury assessment’ and so forth. 

[3.20]     In accordance with her intention to increase her quantum of damages and to claim other heads of ancillary relief, and in an apparent attempt to apply the provisions of the Transitional Act, the plaintiff instituted the present action on 30 July 2013, without first withdrawing the action in the magistrate’s court. 

[3.21]     The differences between her claim in this court and her claim in the magistrate’s court are, first, that whereas in her claim in the magistrate’s court she alleged that her claim was limited to R25 000-00 by virtue of Section 18(1)(b) of the old Act, in her action in this court, she alleges the following:  ‘The plaintiff’s claim is unlimited in terms of the Constitutional (sic) Judgment in the matter of Mvumvu and Others v Minister of Transport and Another CCT 67/10’.

[3.22]     Secondly, whereas in her claim in the magistrate’s court she had very briefly alleged that the nature and extent of her special and general damages amounted to R60 774-85, but that she was confined to an award of R25 000-00, in her action in this court she has spelled-out the nature and extent of her damages in a very detailed manner and has claimed a total sum of R1 950 000-00 under various heads of damages.

[3.23]     The defendant, in this action, did not raise a plea of lis alibi pendens, but one of prescription.  In my view, perhaps the more appropriate defence in the context of the matter ought to have been one of lis alibi pendens.  Be that as it may, the High Court action was, for all intents and purposes, a new and separate action. 

[3.24]     The defendant contends simply that the cause of action having arisen on 20 October 2006, the applicable prescriptive period being a total of five years, the summons having only been issued and served on 30 July 2013, that the claim had, accordingly, prescribed.  Defendant’s counsel argued that it was incumbent upon the plaintiff to have first withdrawn her action in the magistrate’s court before she could rely on the provisions of the Transitional Act to have her action adjudicated in the High Court.

[3.25]     In her replication to the defendant’s plea of prescription, the plaintiff pleaded that her action in the High Court is regulated, essentially, by the provisions of Section 2(1)(a) read with Section 2(1)(e) of the Transitional Act, and that upon a proper application of these provisions, her action has not prescribed.  She contends in her replication that in terms of Section 2(1)(a), prescription in respect of her claim commenced on 01 August 2008, ended five years later on 31 July 2013, and that by virtue of her High Court summons having been served on 30 July 2013, she had met the deadline by one day.  The plaintiff’s counsel argued from the bar, further, that the use of the word “may” in Section 2(1)(e) was merely permissive and did not oblige the plaintiff to first withdraw the action in the magistrate’s court.  Thus she was entitled to have instituted her action in the High Court in the manner that she did.

THE ASSESSMENT

[4] It is common knowledge, at least within the legal profession, that our system of third party compensation for personal injury and related loss arising from motor vehicle accidents is fraught with complications in relation to the appropriateness of the system from a legal and social perspective, together with its manner of management and implementation, which is why in the last seventy years there has been at least five principal Acts passed in relation to third party compensation, together with a myriad of amendments thereto, and about nine commissions appointed by government to review the system at various stages.  See Law Society of SA v Minister for Transport 2011 (1) SA 400 CC at 407D-H.  The present matter is an instance of a serious Constitutional shortcoming with the system that had plagued society for almost fifteen years, from the inception of the old Act on 01 May 1997 until the shortcoming was rectified by the Constitutional Court on 17 February 2011.   

[5] Any significant amendment that is to be effected to our system of third party compensation requires the most careful consideration or the system could easily fall into turmoil.  Presumably this was one of the considerations that motivated the Constitutional Court to refer the matter to Parliament to address instead of imposing its own terms of what the law ought to read.

[6] The provisions of the Transitional Act must be viewed in this light.  It is designed to meet a very peculiar need.  Importantly, its provisions constitute transitional measures.  The word ‘transitional’, in the present context, is synonymous with ‘tentative’, ‘experimental’, and ‘temporary’, as opposed to being certain, definite, and permanent. 

Presumably, at some point in the near future, Parliament will enact its final version of the law in relation to the Constitutional shortcomings of the legislation, which may or may not be the same as the transitional provisions.

[7] I am required to consider the meaning and application of the provisions of Sections 2(1)(a) and 2(1)(e) of the Transitional Act in the present context.  Neither counsel could refer me to any authorities on the matter, nor could I find any myself.

[8] In any event, the Transitional Act provides for, essentially, two categories of claimants:  First, those whose claims are regulated by the old Act, have not yet prescribed, and who have not yet instituted action for the recovery of their compensation, and second, those whose claims are regulated by the old Act and who have already instituted their action, which action remains pending, and which have not prescribed.  This much is clear from the definition of “third party”.

[9] Those claimants described above that elect to have their claim made subject to the apparent advantages of the new Act are assisted in giving effect to their choice by the mechanism described as the transitional regime spelled out in Section 2 of the Transitional Act. 

[10] As stated above, Section 2(1) of the Transitional Act provides that those third parties who elect to have their claim subject to the new Act, will be subject to the regime set out in Sections 2(1)(a) up to 2(1)(g), in accordance with the facts of their case.  For present purposes, however, we may confine ourselves to Sections 2(1)(a) and 2(1)(e).

[11] Section 2(1)(a) reads as follows:

‘Subject to the remaining provisions of this Act, the cause of action of the third party is deemed to have arisen on 01 August 2008 for purposes of Section 12 of the Road Accident Fund Amendment Act, 19 of 2005, and Section 17(4A)(b) of the new Act’.

[12] The Section commences with the qualification, ‘subject to the remaining provisions of this Act’.  The qualification, however, does not impact significantly on the questions that the court has to answer, and nothing much turns on it.

[13] Section 2(1)(a) goes on to provide that 01 August 2008 is the deemed date for the arising of the third party’s cause of action for the purposes of Section 12 of the RAFA Act, and Section 17(4A)(b) of the new Act.  A proper understanding of this deeming provision entails an appreciation of the latter two legal provisions.

[14] Section 12 of the RAFA Act reads as follows:

‘Any claim for compensation under Section 17 of the principal Act in respect of which the cause of action arose prior to the date on which this Act took effect must be dealt with as if this Act had not taken effect’.

[15] The principal Act is a reference to the old Act.  It must be remembered that the RAFA Act was, effectively, the new Act as it introduced into law all of those amendments that now constitute the new Act.  The extract quoted above constituted the savings clause in terms of which the new Act was not given retrospective effect.

[16] The deeming provision in Section 2(1)(a) of Transitional Act was, therefore, intended to overcome the savings clause of Section 12 of the RAFA Act, without which would have been anomalous.

[17] This conclusion is clear by the use of the word ‘deemed’, which is synonymous with the words ‘putative’, ‘ostensible’, and ‘hypothetical’, as opposed to being actual, real, and true.

[18] This interpretation is fortified by a consideration of the provisions of the second part of Section 2(1)(a), namely the reference to Section 17(4A)(b) of the new Act, which reads as follows:

‘In respect of any claim for loss of income or support the amounts adjusted in terms of paragraph (a) shall be the amounts set out in the last notice issued prior to the date on which the cause of action arose’.

[19] For ease of understanding, Section 17(4)(c) of the new Act provides that claims for loss of income and support are subject to certain annual limits, and Section 17(4A)(a) provides that these annual limits are to be adjusted every three months by a duly Gazetted Notice to counter the effect of inflation.  

[20] Section 17(4A)(b) simply sets out that the rate at which a claimant may claim for loss of income and support is the rate applicable at the time that his/her cause of action arose. 

[21] In the absence of the deeming provision in Section 2(1)(a), this would not be possible for the third parties envisaged in the Transitional Act, as the third parties’ cause of action would have arisen before Section 17(4)(c) came into force on 01 August 2008. 

[22] It was, therefore, necessary for the Transitional Act to create an artificial date for the arising of the cause of action in respect of claims of such third parties for the limited purposes stated in Section 2(1)(a).   

[23] The plaintiff’s argument that her entire cause of action now relocates to 01 August 2008 as the new commencement date for prescription purposes is, accordingly, untenable and is rejected.

[24] Turning to the provisions of Section 2(1)(e) then, they read as follows:

‘A third party who has, prior to this Act coming into operation-

(i)     lodged a claim with the Fund on the prescribed claim form in terms of the old Act, shall not be required to lodge an RAF 1 form in terms of the new Act; and

(ii)    instituted an action against the Fund in a Magistrate’s court, may withdraw the action and, within 60 days of such withdrawal, institute an action in a High Court with appropriate jurisdiction over the matter: Provided that no special plea in respect of prescription may be raised during that period’.

[25] In keeping with the primary purpose of the Transitional Act, Section 2(1)(e) provides specifically for those claimants, such as the present plaintiff, who had already instituted their action in a lower court because of the monetary limitations of their claims at that stage, but who now wish to claim the true amount of their loss. 

[26] Such claimants are now given the legislative authority to withdraw their actions in the magistrate’s court and institute a fresh action for the true amount of their loss in the High Court. 

[27] The provisions of Section 2(1)(e) are quite specific.  The plaintiff is required to first withdraw the action in the Magistrate’s court.  The fact that the plaintiff is allowed merely sixty days thereafter to institute the action in the High Court is indicative of this fact.  The sixty-day time limit is there for good reason.  It would be untenable for a plaintiff to withdraw his/her action and, thereafter, not institute the High Court action for an indefinite period.  Legal proceedings need to be certain, and need to end.  The Transitional Act allows the plaintiff to withdraw the action in the Magistrate’s court for the sole purpose of instituting the action in a court that has a higher monetary jurisdiction, and for no other reason.  Theoretically, therefore, although the Transitional Act does not state so, it would, likewise be competent for a plaintiff to withdraw the action in a district magistrate’s court and institute a new one in a regional magistrate’s court.  The conditions for the withdrawal of the action, however, are required to be fulfilled.

[28] In the present matter, it was, at least, common cause that the plaintiff had complied with the provisions of Section 2(1)(e)(i), and nothing further needs be said about it.   The peculiar scenario that the present facts disclose, however, is that the plaintiff proceeded to institute her action in the High Court without first withdrawing her action in the Magistrate’s court.  The plaintiff’s counsel argued that the use of the word ‘may’ in Section 2(1)(e) gives her a discretion whether or not to withdraw the action in the Magistrate’s court.  I cannot agree. 

[29] On a plain reading of the provision, there are three preliminary requirements that need to be fulfilled before the plaintiff would be entitled to institute her action in the High Court:

First, the plaintiff must withdraw the action in the Magistrate’s court;

Second, she must institute her action in the High Court within sixty days of the withdrawal; and

Third, the plaintiff’s claim in the Magistrate’s court must not be susceptible to a plea of prescription before the action has been instituted in the High Court.

[30] The rationale for the third condition is probably that if the plaintiff’s claim has prescribed, then there would be little point in instituting the High Court action.  Presumably, therefore, where the plaintiff’s claim has, clearly, not prescribed, the plaintiff would be entitled to proceed on the basis that his/her claim is not assailable by a plea of prescription; in the event of uncertainty or in borderline cases the defendant would have to indicate to the plaintiff whether it intends pursuing such a plea; and in cases where the defendant has already pleaded, its plea would dictate the applicable position.  If a plaintiff’s claim in the Magistrates Court is susceptible to a plea of prescription, that plea ought to first be adjudicated in that court before the plaintiff may be entitled to institute the new action in the High Court.

[31] In the present matter, the defendant had already pleaded in the Magistrate’s court action, and had not raised prescription.  The plaintiff was, therefore, entitled to have withdrawn her action in the Magistrate’s court and instituted one in the High court within the stipulated time.

[32] The plaintiff’s argument that the Section entitles her to institute the action in the High Court without first withdrawing the one in the Magistrate’s court is difficult to appreciate, as, firstly, it may render her summons in the High Court excipiable on the basis of lis alibi pendens, and, secondly, if it was not excipiable it would create an instant defence to the defendant on that basis.  The principle underlying the defence of lis alibi pendens is that there should be finality in litigation.  If the plaintiff’s argument is to be upheld, then the Transitional Act would be at cross-purposes with itself, as, on the one hand it would endorse a plaintiff’s entitlement to pursue a fresh action, whilst on the other, it would create a good defence for a defendant in terms of which the fresh action may be terminated.  This is illogical.  In interpreting the Section, it must be presumed that the legislature would have neither intended nor endorsed such absurd consequences.  Indeed, one of the reasons that the legislature would have imposed the obligation upon a plaintiff to first withdraw the prior action is to prevent him/her from falling foul of a potential lis alibi pendens exception or plea in the new action.

[33] In the circumstances, I cannot agree with the plaintiff’s submission that it was not necessary for her to have first withdrawn the action in the Magistrate’s court.

CONCLUSION

[34] I appreciate that these are very peculiar circumstances, and not the typical prescription scenario that usually presents.  I am mindful of the fact that the plaintiff was attempting to give effect to her right to claim the appropriate compensation that she was entitled to, that claims against the Road Accident Fund have social-security traits, and that the difference in the amounts of her claims in the two courts is substantial.  This is exacerbated by the fact that the defendant has conceded that, except for the prescription point, it has no defence on the merits of the matter.  However, the plaintiff has left the court very little room to manoeuvre in considering alternative options to dismissing the action.  The summons, for instance, does not make appropriate allegations in terms of which it could, perhaps, be liberally deduced that the plaintiff has complied with all of the preliminary requirements in terms of the Transitional Act, albeit in a less than traditional fashion, thereby entitling her to have instituted the action in the High Court.  The summons, in fact, reads as if the action had never been instituted previously.  The plaintiff’s counsel also did not suggest any alternatives that may be available to the court.  Any alternative order that deviates unjustifiably from what may be considered appropriate in the circumstances would contribute to uncertainty in the law and is resisted.  Perhaps the plaintiff could, hereafter, consider still complying with the provisions of the Transitional Act as the Magistrate’s court action would still be pending.

[35] In the circumstances, the plaintiff’s action in this court being a new and separate action, the cause of action having arisen on 20 October 2006, the common cause prescriptive period having been agreed at five years in accordance with Section 23(1) read with Section 23(3) of the old Act, the applicable prescriptive period having elapsed on 19 October 2011, the plaintiff’s summons having been served on the defendant on 30 July 2013, the plaintiff’s claim has prescribed.

[36] I, accordingly, make the following order:

(i)     The defendant’s special plea of prescription is upheld.

(ii)     The plaintiff’s action is dismissed with costs.       

_________________________

A CHAITRAM

ACTING JUDGE OF THE HIGH COURT

GAUTENG LOCAL DIVISION

Appearances:

 

On behalf of the Plaintiff:                     Adv. C Ascar                    

On behalf of the Defendant:                Adv. Mqushulu  

                                                                       

Date Heard:  15 October 2015                  

Date Judgment Delivered:                  

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