THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Reportable
CASE NO 585/2006

In the matter between

THE ROAD ACCIDENT FUND

Appellant

and

THEMBISILE VIERA NGUBANE

Respondent

Coram:
Scott, Mthiyane, Jafta, JJA and

Malan, Mhlantla AJJA

Heard:
7 SEPTEMBER 2007
Delivered: 21 SEPTEMBER 2007

Summary: Regulation 2(3) read with section 17(1)(b) of the Road
Accident Fund Act 56 of 1996 – claim to be lodged with the Fund within
two years – the Fund may waive this requirement or enter into a
compromise.

Neutral citation: This judgment may be referred to as Road Accident
Fund v Ngubane [2007] SCA 114 (RSA)

___________________________________________________________

JAFTA JA
[1] On 8 December 2000 a collision occurred on Mid Illovo Highway,
Umbumbulu, KwaZulu-Natal between a motor vehicle driven by the
respondent (the plaintiff) and another vehicle driven by an unidentified
person. Arising from the injuries sustained by her in the collision, the
plaintiff lodged a claim and later instituted action for compensation
against the Road Accident Fund (the Fund) in the Durban High Court.
The Fund, in a special plea, alleged that the plaintiff’s claim had
prescribed as it was lodged after the expiry of two years from the date of
the collision. However the plaintiff had, in her particulars of claim,
alleged that the Fund had agreed to pay 80 per cent of damages proved at
the trial.

[2] Having ordered a separation of issues, the court below (Hurt J) was
asked to deal with the matter as if it were an exception and determine
whether on the facts alleged in the particulars of claim, the Fund had the
authority to conclude an agreement to compensate the plaintiff. The
importance of this was that the allegations in the plaintiff’s particulars
were taken as correct for purposes of deciding the special plea. The
remaining issues stood over for determination at a later date. I will adopt
the same approach in deciding this appeal.

[3] The learned judge held that ‘the passage of a period of two years
after the date of injury, without the delivery of a claim form in terms of
section 24 cannot vitiate any claim which the “plaintiff” may have’.
Accordingly he ruled that the defendant had the capacity to enter into the
agreement in question and postponed the matter sine die at the request of
the parties. The Fund appeals against that ruling with leave of this court.

[4] It is common cause that the plaintiff did not comply with reg 2(3)
of the regulations made under s 26 of the Road Accident Fund Act 56 of
1996 (the Act), regarding the time frame within which she ought to have
lodged her claim. The regulation requires that claims such as the present
be lodged with the Fund within two years from the date of the accident.
In this case the plaintiff’s claim was lodged six weeks after the deadline.

[5] But the Fund (through a claims handler) entered into an agreement
with the plaintiff in terms whereof it admitted liability to an apportioned
degree and agreed to pay 80 per cent of the plaintiff’s established
damages. This agreement was concluded after the period of two years had
expired. The question that arose both in this court and the court below
was whether the Fund had, by entering into the agreement, competently
caused to be enforceable what was otherwise an invalid and
unenforceable claim, in view of the peremptory provisions of the
subregulation.

[6] Before dealing with the Fund’s submissions it is necessary to refer
to the relevant legislation. The Fund’s liability to compensate claimants
such as the plaintiff is imposed by s17 of the Act. The section provides:

‘(1)
The fund or an agent shall-
(a)
….
(b)
subject to any regulation made under section 26, in the case of a claim for
compensation under this section arising from the driving of a motor vehicle
where the identity of neither the owner nor the driver thereof has been
established, be obliged to compensate any person (the third party) for any loss
or damage which the third party has suffered as a result of any bodily injury to
himself or herself or the death of or any bodily injury to any other person,

caused by or arising from the driving of a motor vehicle by any person at any
place within the Republic, if the injury or death is due to the negligence or
other wrongful act of the driver or of the owner of the motor vehicle or of his
or her employee in the performance of the employee’s duties as employee.’

[7] The relevant part of regulation 2 reads:

‘(3)
A claim for compensation referred to in section 17(1)(b) of the Act
shall be sent or delivered to the Fund, in accordance with the provisions of
section 24 of the Act, within two years from the date upon which the claim
arose, irrespective of any legal disability to which the third party concerned
may be subject and notwithstanding anything to the contrary in any law.

(4)
The liability of the Fund in respect of any claim sent or delivered to it
as provided for in subregulation (3) shall be extinguished upon the expiry of a
period of five years from the date upon which the claim arose, irrespective of
any legal disability to which the third party concerned may be subject and
notwithstanding anything to the contrary in any law, unless a summons to
commence legal proceedings has been properly served on the Fund before the
expiry of the said period.’

[8] Relying on Geldenhuys & Joubert v Van  Wyk and Another; Van
Wyk v Geldenhuys & Joubert and Another 2005 (2) SA 512 (SCA),
counsel for the Fund submitted that the lodging of a claim within two
years of the collision is a precondition for the existence and enforceability
of any claim against the Fund under s 17(1)(b). Accordingly, so it was
argued, neither the claims handler nor the Fund was empowered to ‘give
life’ to a claim after the expiry of the two-year period by concluding an
agreement to accept liability. Any such agreement would, the argument
concluded, be ultra vires the Act and regulations and hence not binding
on the Fund. It was also argued that, although s 4(1)(b) empowers the

Fund to ‘investigate and settle’ claims arising under the Act, it does not
entitle the Fund to undertake liability where none existed at the time of
the settlement or compromise.

[9] I do not accept the argument. Geldenhuys & Joubert was
concerned with the validity of regulation 2(3), and which upheld it (see
para 24). The statements made in that case to the effect that ‘[t]he
regulation plainly makes the lodging of the claim within the two-year
period a precondition to the existence of the debt’ and ‘[i]f the claim is
not lodged within this period, there is no “debt’’’ must be read in context.
The reference to ‘no debt’ was clearly intended to be understood as
meaning ‘no recoverable debt’. This is so because in that case the court
referred to the word ‘debt’ in the context of prescription as contemplated
in the Prescription Act 68 of 1969. In that context the term ‘debt’ carries
a wide and general meaning which includes a claim for damages.

[10] In the present case the claim came into existence at the time of the
collision on 8 December 2000. The plaintiff’s failure to lodge it timeously
with the Fund did not affect its existence at all. Instead what was
compromised was her right to enforce the claim. In rejecting the
proposition that a claim does not exist in the absence of compliance, this
court in Road Accident Fund v Smith 2007 (1) SA 172 (SCA) said (para
6):
‘There is a claim but, unless there has been compliance with the regulation, the claim
is not enforceable. Put differently, absent compliance with the regulation, the Fund is
not obliged to compensate the claimant. It is the enforceability of the claim, not its
existence, which is compromised by non-compliance with the regulation.’

See also Engelbrecht v Road Accident Fund and Another 2007 (5) BCLR

457 (CC) paras 21-22.

[11] It is by now settled that a statutory provision such as regulation
2(3) which was enacted for the special benefit of a body such as the Fund
may be waived by that body if no public interests are involved (SA Eagle
Co Ltd v Bavuma 1985 (3) SA 42 at 49G-H). Accordingly, compliance
with the regulation can be waived by the Fund (Road Accident Fund v
Smith para 8). It is not required, as was submitted on the Fund’s behalf,
that this waiver be specifically pleaded because implicit in the
compromise is a waiver by the Fund of compliance with the regulation. In
this case sufficient facts have been alleged to inform the Fund of the case
the plaintiff is relying on (see Imprefed (Pty) Ltd v National Transport
Commission 1993 (3) SA 94 (A)).

[12] Consistently with waiver the parties have, by entering into a
compromise, terminated whatever rights and obligations they may have
had including the Fund’s right to demand compliance with regulation
2(3). In other words the plaintiff is not entitled to recover full
compensation for damages she had suffered and the Fund is precluded
from raising any defence it had against the original claim. The agreement
of compromise gave rise to new rights and obligations upon which the
plaintiff has rooted her cause of action (see Lieberman v Santam Ltd 2000
(4) SA 321 (SCA) paras 11-12). Unless reserved in the compromise,
parties thereto are precluded from enforcing rights and obligations arising
from the compromised claim. In Hamilton v Van Zyl 1983 (4) SA 379 (E)
the court said (at 383F-H):

‘A compromise need not necessarily however follow upon a disputed contractual
claim. Any kind of doubtful right can be the subject of a compromise….Delictual

claims are, for example frequently the subject of a compromise. Nor need the claim be
even prima facie actionable in law. A valid compromise may be entered into to avoid
even a spurious claim, and defendants frequently, for various reasons, settle claims
which they know or believe the plaintiff will not succeed in enforcing by action.
An agreement of compromise, in the absence of an express or implied reservation of
the right to proceed on the original cause of action, bars the bringing of proceedings
based on such original cause of action…. Not only can the original cause of action no
longer be relied upon, but a defendant is not entitled to go behind the compromise and
raise defences to the original cause of action when sued on the compromise.’

See also Gollach & Gomperts (1978) (Pty) Ltd v Universal Mills &
Produce Co (Pty) Ltd and Others 1978 (1) SA 914 (A) at 921.

[13] It follows that on the facts as they presently stand, the plaintiff has
a claim enforceable in law. The position may, however, change if she
fails to prove the agreement of compromise at the trial. Therefore, the
ruling of the court below was correct.

[14] In the result the appeal is dismissed with costs.

____________________
C N JAFTA
JUDGE OF APPEAL

CONCUR: )
SCOTT JA

)
MTHIYANE JA

)
MALAN AJA

)
MHLANTLA AJA
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal

Date:
21 September 2007

Status:
Immediate

RAF v NGUBANE

Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court of
Appeal

Today, the Supreme Court of Appeal (the SCA) dismissed an appeal by
the Road Accident Fund against the judgment of the Durban High Court,
which ruled that a woman who failed to lodge her claim within a period
of two years was entitled to sue the Fund. The Fund had contended that
such claim had prescribed and that a claims handler who had agreed to
pay the claim after the expiry of two years had no authority to bind the
Fund.

The SCA rejected this argument and held that a provision which was
enacted for the special benefit of the Fund may be waived by it and by
entering into the agreement to pay, the Fund (through the claims handler)

had waived its right to demand that the regulation requiring that claims be
lodged within two years, be complied with.