THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 799/15

In the matter between:

LUVUYO NICOLAAS MBELE

APPELLANT

and

ROAD ACCIDENT FUND

RESPONDENT

Neutral citation: Mbele v Road Accident Fund (799/15) [2016] ZASCA 134
(29 September 2016)

Coram:
Shongwe, Saldulker, Swain and Zondi JJA and Dlodlo AJA

Heard:
26 August 2016

Delivered: 29 September 2016

Summary: Road Accident Fund Act 56 of 1996 – a claim for future medical
expenses based on an undertaking in terms of s 17(4)(a)(i) of the Act in respect
of an action for damages arising from a motor vehicle accident lodged in terms
of s 17(1) of the Act is not subject to prescription under the Prescription Act 68
of 1969, instead, s 23(3) of the Road Accident Fund Act as it read  prior to its
amendment in 2008 is applicable.

ORDER
________________________________________________________________

On appeal from:  Western Cape Division of the High Court, Cape Town
(Savage J sitting as court of first instance).
1 The appeal is upheld with costs.
2 The order of the court a quo is set aside and substituted with the following:
‘The special plea of prescription is dismissed with costs.’

JUDGMENT
________________________________________________________________

Shongwe JA (Saldulker, Swain, Zondi JJA and Dlodlo AJA concurring)
[1] This appeal concerns the question whether an undertaking that was made
by the respondent, the Road Accident Fund (the Fund), in terms of s 17 (4)(a)(i)
of the Road Accident Fund Act 56 of 1996 (the Act) for future medical and
hospital expenses, has prescribed. This issue depends for its resolution on
whether the relevant prescription legislative regime applicable is s 23(3) of the
Act or s 11(d) of the Prescription Act 68 of 1969 (the Prescription Act). Related
to this issue is the question of what the effect of the amendment of s 23(3) of the
Act is on the respondent’s plea of prescription.

[2] On 7 July 2006 the appellant was injured in a motor vehicle collision. He
instituted action proceedings against the Fund in terms of s 17(1) and in
accordance with the procedure set out in s 24 of the Act. The summons in that
action was lodged timeously in 2007 and the claim was subsequently settled.
The settlement agreement was made an order of court on 21 April 2009 and
included, inter alia, payment of a lump sum in excess of R2 million for general
damages and the costs of suit. Prior to the conclusion of the settlement

agreement the Fund made an undertaking, on 23 October 2008, in terms of s
17(4)(a)(i) of the Act to compensate the appellant for the costs of future medical
and hospital expenses, after the costs have been incurred and upon proof thereof
(the undertaking).

[3] In the light of the undertaking the appellant, around October 2010, sent a
letter of demand to the Fund and requested payment in respect of hospital and
medical expenses, and presented proof of the expenses he allegedly incurred. It
appears that this letter was received by the Fund in November 2010, but no
payment was forthcoming.

[4] Subsequently, on 10 April 2013, the appellant served a summons on the
Fund claiming, in terms of the undertaking, the sum of R94 063.28. The
appellant alleged that this sum was for medical and hospital expenses and that
he had furnished the Fund with the proof of these expenses, but that the Fund
failed to pay. In opposing the action the Fund filed a special plea that the
appellant’s claim had prescribed within a period of three years from the date
that the abovementioned expenses were allegedly incurred. According to the
appellant, these expenses were incurred in or about June 2009. Therefore, the
Fund contended, the claim prescribed in or before July 2012.

[5] In the court a quo, the parties agreed on a stated case upon which the
Fund’s special plea of prescription was to be argued. In terms of the stated case,
it was uncontested that the undertaking had been issued by the Fund on 28
October 2008, and that it was for payment of future hospital and medical
treatment incurred, on proof thereof. It was also uncontested that the appellant
had not been paid in terms of the undertaking. The Fund however contended
that the undertaking was contractual and not purely statutory in nature; that it
amounted to a debt and that its obligation to pay arose once the appellant

incurred the debt and had furnished proof. Thus, the debt had prescribed in
terms of s 11(d) of the Prescription Act which provides that the periods of
prescription of debts shall, save where an Act of Parliament provides otherwise,
be three years in respect of any other debt.

[6] On the other hand the appellant contended that there was no prescription
applicable as regards the undertaking, and that the Fund was obliged to
compensate him in terms of his claim regardless of the date of treatment or
service because his claim was not susceptible to prescription, due to the fact that
it formed part of a unitary claim instituted and prosecuted in terms of s 17(1) of
the Act. In other words when the settlement agreement was reached, which
included the undertaking, the Fund admitted liability for future medical and
hospital expenses incurred as part of its liability for all the heads of damages
claimed.

[7] The matter was eventually set down for the hearing of the special plea.
The court’s view was that the undertaking was a contractual obligation which
was separate from the s 17(1) claim instituted by the appellant in 2006. It
equated the undertaking to a discrete and new agreement and accordingly found
that the Prescription Act was applicable. This meant, the court continued, that
since the appellant had failed to claim within three years from the date upon
which the debt became due, his right to claim had prescribed as provided in s
11(d) of the Prescription Act.  Accordingly, it upheld the Fund’s plea with costs.
The current appeal is against this order upholding the special plea and is with
leave of the court a quo.

[8] Before us, counsel for the appellant persisted with his submission that any
claim lodged in terms of the undertaking does not and cannot attract
prescription. He argued further that the undertaking does not create a new and

independent contractual obligation or a distinct claim based on a different cause
of action. His view was that for purposes of prescription, the provisions of the
Act as it appeared prior to its amendment was applicable.

[9] It is indeed a startling proposition by the appellant that claims in terms of
an undertaking in terms of the Act do not prescribe at all, and counsel was
unable to provide any authorities to support such a proposition. I do not agree
with his contention and I am of the view that it has no merit. The law
encourages finality in litigation therefore no claim can exist indefinitely. (See
Road Accident Fund & another v Mdeyide [2012] ZACC 18; 2011 (2) SA 26
(CC) para 8.)

[10] On its part, the Fund argued that the undertaking constituted a new cause
of action which is susceptible to prescription. Counsel for the Fund submitted
that the undertaking is a stand-alone agreement which creates a new contractual
foundation and which exists independently of the claim in terms of s 17(1) of
the Act. As regards prescription, the Fund submitted that s 23(3) of the Act prior
to its amendment did not specify undertakings and was limited to s 17(1) claims
and consequently, the applicable prescription period was provided for in s 11(d)
of the Prescription Act. Counsel also submitted that the nature of the claim
transforms into something else, which he was however unable to describe. He
argued that the introduction of s 17(4)(a) of the Act was a deviation from the
common law rule of delictual claims. It is indeed so and as Trollip JA remarked
in Marine & Trade Insurance Co Ltd v Katz NO 1979 (4) SA 961 (A) at 970C-
D:
‘The purpose of the provision [Section 21 (IC)(a)] was to innovate a departure from the
common law.’
Section 21(IC)(a) of the Compulsory Motor Vehicle Insurance Act 56 of 1972
is the predecessor of s 17(4)(a) of the Act.

[11] Counsel for the Fund referred us to Stupel & Berman Inc v Rodel
Financial Services (Pty) Ltd [2015] ZASCA 1; 2015 (3) SA 36 (SCA) para 15
and to Lieberman v Santam Ltd 2000 (4) SA 321 (SCA) in support of the
proposition that in an agreement couched as an undertaking, the undertaking
creates a new contractual foundation for a valid and enforceable obligation to
pay which exists independently of any previous obligation under the Act. In
Stupel & Berman the cause of action related to a transaction of purchase and
sale which involved the transfer of immovable property. This case had nothing
to do with a collision regulated by the Act and is distinguishable from the
present case, because the undertaking referred to there was indeed a stand-alone
agreement between Rodel, on the one hand, and Stupel & Berman on the other
hand, from which certain obligations arose for Stupel & Berman. Stupel &
Berman acted as the conveyancing attorneys.

[12] The Lieberman case is also distinguishable from the present case. In para
12 Vivier JA observed that:
‘It is sufficient to say that the agreement provided the appellant with a contractual basis upon
which to found a cause of action for payment which he was free to invoke if he so chose’.
In that case the cause of action was not the collision itself but the action was
based on an agreement entered into by the parties whereby the fund admitted
liability and agreed to pay 50 per cent of such losses and damages as might be
agreed between the parties or ordered by the court. It was not an undertaking in
terms of s 17(4)(a) of the Act. The parties had also concluded a verbal
agreement in terms whereof the Fund had undertaken not to plead prescription
before a particular date. All in all, both cases do not deal with the provisions of
s 17(1) and 17(4)(a) of the Act. In Nonkwali v Road Accident Fund [2008]
ZASCA 3; 2009 (4) SA 333 (SCA) para 8 Maya JA (as she then was) correctly
observed that there was a plethora of authorities to the effect that a claimant

seeking compensation for damages sustained as a result of wrongful and
negligent driving under the Act had ‘… but a single, indivisible cause of action
and that the various items constituting the claim were thus not separate claims
or separate causes of action.’ She referred with approval to what Corbett JA said
in Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A) at 836D-E. (See also
Evins at 837A-C).

[13] It is necessary, before I proceed to deal with the issues raised in
paragraph 1 above, to set out the relevant legislative provisions of the Act
dealing with the prescription of undertakings both prior to and after the Act was
amended in 2008. Before its amendment s 23 of the Act read as follows:
‘(3) Notwithstanding subsection (1), no claim which has been lodged in terms of s 24 shall
prescribe before the expiring of a period of five years from the date on which the cause of
action arose.’
This subsection was amended with effect from 1 August 2008, by s 10 of the
Road Accident Fund Amendment Act 19 of 2005, and currently reads as
follows:
‘(3) Notwithstanding subsection (1), no claim which has been lodged in terms of section 17
(4) (a) or 24 shall prescribe before the expiry of a period of five years from the date on which
the cause of action arose.’
The only difference between the unamended version and the amended one is the
insertion of s 17(4)(a). This insertion, in my view, buttresses the proposition
that the legislative regime that determines prescription in claims lodged in terms
of s 24 read with s 17(1) of the Act shall be the Road Accident Fund Act and
not the Prescription Act.

[14] For the present purposes it is clear that the Prescription Act is not
relevant.  It is also not clear from the court a quo’s judgment why it saw fit to
apply it. My understanding is that as part of the settlement, the Fund undertook
to compensate the appellant for future medical and hospital expenses, after such

expenses have been incurred and proved. Had there been no collision which
resulted in the injuries to the appellant and the admission of liability by the
Fund, the undertaking would not have come into existence. Thus the claim filed
in terms of s 17(1) read with s 24 of the Act, which claim included future
medical and hospital expenses is the basis upon which the undertaking in terms
of s 17(4)(a)(i) of the Act was issued. It cannot be that this claim is a separate
claim unrelated to a claim in terms of s 17(1) of the Act. Accordingly, it is
ineluctable that the period of prescription of a claim under s 17(4)(a) the Act
can only be determined in terms of s 23 of the Act and not in terms of the
Prescription Act. The principles governing the interpretation of statutes must
apply as explained in Natal Joint Municipal Pension Fund v Endumeni
Municipality [2012] ZASCA; 2012 (4) SA 593 para 18 that interpretation is a
process of attributing meaning to the words used in a document read in context
and having regard to the purpose of the provision. (See also Bothma-Batho
Transport (EDMS) Bpk v S Bothma & Seun Transport (EDMS) Bpk [2013]
ZASCA 176; 2014 (2) SA 494 para 10.)

[15] What I need to emphasize is that future medical expenses in relation to a
claim in terms of s 17(1) of the Act cannot constitute a separate and
distinguishable claim but it is an integral and indivisible part of a third party
claim for damages. (See Evins v Shield Insurance Co Ltd at 836A – 837D;
Nokwali v Road Accident Fund [2008] ZASCA 3; 2009 (4) SA 333 (SCA) paras
8 – 9. Klaas v Union and South West Africa Insurance Co Ltd 1981 (4) SA 562
(A) at 577D-H. H B Klopper in his article ‘Prescription of Obligations Arising
from Undertaking Issued by the Road Accident Fund in Pursuance of Section
17(4)(a) of the Road Accident Fund Act 56 of 1996’, 2014 (77) THRHR 485 at
488 observes that ‘[a]n undertaking issued in terms of the strict wording of s
17(4)(a) also does not create a contractual relationship between the claimant
and the Fund’. He opines that it is only rights contractually created that are

susceptible to prescription as being a debt, and cites s 10 of the Prescription Act
and Evins at 838. I agree with the learned author.  It is clear from the above
discussion that s 17(4)(a) of the Act does not create any new and independent
contractual obligation or a debt independent of s 17(1).

[16] Furthermore the Constitutional Court has put paid to the question of
which legislative regime is applicable in these circumstances. In Road Accident
Fund & another v Mdeyide para 50, Van der Westhuizen J observed that:
‘There is therefore a clear reason for the difference between the Prescription Act and the RAF
Act. The Prescription Act regulates the prescription of claims in general, and the RAF Act is
tailored for the specific area it deals with, namely claims for compensation against the Fund
for those injured in road accidents. The legislature enacted the RAF Act – and included
provisions dealing with prescription in it – for the very reason that the Prescription Act was
not regarded as appropriate for this area. Looking for consistency in this context is a quest
bound to fail.’

[17] The Act was established, in my view, to give the greatest possible
protection and to promote the socio-economic rights of victims of motor vehicle
accidents. It must be construed at all times to give access to courts and justice
rather than to limit access to justice. (See Law Society of South Africa &
another v Minister for Transport & another [2010] ZACC 25; 2011 (1) SA 400
(CC) para 40; Mvumvu & others v Minister of Transport & another [2011]
ZACC 1; 2011 (2) SA 473 (CC) at 479 para 20; Englebrecht v Road Accident
Fund & another [2007] ZACC 1; 2007 (6) SA 96 (CC) para 23 and Aetna
Insurance Co v Minister of Justice 1960 (3) SA 273 (A) at 285E-F.)

[18] In summary, in my view, s 17(1) to (4), 23(1) to (3) and 24 of the Act,
must be read together. The reference in s 23(3) of the Act (before its
amendment) to a ‘claim which has been lodged in terms of s 24’ must include a
claim for the payment of future medical expenses, A claim in terms of s 17(1)

read with s 17(4) of the Act ‘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. . .’. This claim is lodged in terms
of s24, accompanied by the requisite medical report. The Fund is thereafter
entitled to furnish an undertaking to cover the payment of future medical
expenses.  The third party cannot however claim or insist that the Fund furnish
an undertaking, (see Marine & Trade supra at 970H), and consequently such a
‘claim’ cannot be ‘lodged’ for the purposes of s 23(3). The furnishing of an
undertaking does not alter the fact that the claim for future medical expenses is
and remains one in terms of s 17(1), which is lodged in terms of s 24. It does,
however, affect ‘the date upon which the cause of action arose’ for the purposes
of s 23(3) of the Act, in respect of individual claims which are covered by the
undertaking. This ‘date’ must be the date when a complete cause of action
arises, entitling the third party to institute action for recovery of the claims
covered by the undertaking.
[19] A complete cause of action in respect of future medical claims covered by
an undertaking must arise when the costs are incurred. In terms of s 17(4)(a)(i)
of the Act, the Fund is only obliged to compensate the third party in respect of
the costs ‘after the costs have been incurred and on proof thereof’. In addition,
the Fund is only obliged to compensate the third party for the reasonable costs
of the defined medical expenses, which may not necessarily be their actual cost.
(See Marine & Trade supra at 972). If the Fund declines to pay the medical
costs claimed, the third party will have to institute action within five years of
the complete cause of action arising, being the date when the costs were
incurred. A complete cause of action cannot arise as at the time of the accident,
in respect of future medical expenses covered by an undertaking, as these costs
have not yet been incurred. If this were not so, the recovery of any medical
expenses incurred more than five years after the accident would be precluded.

[20] Although the claim for future medical expenses forms an integral and
indivisible part of a third party claim for damages, the effect of an election by
the Fund to furnish an undertaking in terms of s 17(4)(a) of the Act, is that
payment of these costs only falls due ‘after the costs have been incurred’. This
does not mean that a separate and distinct cause of action is created in respect of
future medical claims covered by the terms of an undertaking, but that the
obligation on the part of the Fund to make payment of these damages only
arises after the medical costs have been incurred and the third party has thereby
acquired a complete cause of action.
[21] The subsequent amendment of s 23(3) of the Act to include a reference to
s 17(4)(a) of the Act confirms and clarifies the position, that prescription in
respect of claims for payment of medical expenses, covered by the terms of an
undertaking, only intervenes ‘five years from the date on which the cause of
action arose’. The reference in s 23(3) to a ‘claim which has been lodged in
terms of s 17(4)(a). . .’ can only refer to a claim for payment of medical
expenses covered by the requisite undertaking and not to the undertaking itself.
As pointed out, this is because a third party cannot claim or insist that the Fund
furnish an undertaking and consequently such a claim cannot be ‘lodged’ for the
purposes of s 23(3).
[22] In this case the appellant’s hospital and medical expenses were incurred
in June 2009 and summons was issued on 9 April 2013 to recover these
expenses. Summons was accordingly issued within the period of five years as
provided for in s 23(3) of the Act and the claims of the appellant had not
prescribed.
[23] The following order is made:
1 The appeal is upheld with costs.

2 The order of the court a quo is set aside and substituted with the following:
‘The special plea of prescription is dismissed with costs.’

__________________

J B Z Shongwe

Judge of Appeal

Appearances

For the Appellant:
E Lombard

Instructed by:

A Batchelor & Associates, Cape Town;

McIntyre & Van der Post, Bloemfontein.

For the Respondent:
A Bhoopchand

Instructed by:

Mayats Attorneys, Cape Town;

Symington & De Kok, Bloemfontein.
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

29 September 2016

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form part of
the judgment.

Mbele v Road Accident Fund (799/2015) [2016] ZASCA 134 (29 September 2016)

MEDIA STATEMENT

The Supreme Court of Appeal today upheld an appeal against a judgment of the Western Cape
Division of the High Court, Cape Town, concerning the prescription of an undertaking made by the
Road Accident Fund (the Fund) in terms of s 17(4)(a)(i) of the Road Accident Fund Act 56 of 1996
(the Act). The question was two-fold, ie whether a claim based on an undertaking that was made by
the Fund in terms of s 17(4)(a)(i) of the Act for future medical and hospital expenses has prescribed,
and whether the relevant prescription legislative regime applicable is s 23(3) of the Act or s 11(d) of
the Prescription Act 68 of 1969. Related to these issues was the question of what the effect of the
amendment of s 23(3) of the Act was on the Fund’s plea of prescription. The Supreme Court of
Appeal held that the appellant’s claim in terms of s 17(4)(a)(i) of the Act  in respect of an action for
damages arising from the motor vehicle accident, lodged in terms of s 17(1) of the Act, was not
subject to prescription under the Prescription Act, instead, s 23(3) of the Act as it read prior to its
amendment in 2008, was applicable, as it did not constitute a new cause of action.

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