Road Accident Fund v Cloete NO and Others

• Jurisdiction: South Africa
• Judge: Harms DP, Heher JA, Maya JA, Griesel AJA and Tshiqi AJA
• Judgment Date: 29 September 2009
• Citation: 2010 (6) SA 120 (SCA)
• Docket Number: 474/08
• Hearing Date: 11 September 2009
• Counsel: WRE Duminy SC for the appellant. O Rogers SC (with AS de Villiers) for the first and second respondents. No appearance for the third respondent.
• Court: Supreme Court of Appeal

Griesel AJA:

[1] This is an appeal and cross-appeal against a judgment of the High Court, Cape Town (Cleaver J), which comes before us with leave of that G court. The matter arises from an arbitration between the parties in the course of which the arbitrator stated a question of law for the opinion of the court in terms of s 20(1) of the Arbitration Act 42 of 1965 (the Act). [1]

[2] The appellant, the Road Accident Fund (the Fund), established in terms of the Road Accident Fund Act 56 of 1996, is the defendant in the arbitration. The first respondent (the first claimant in the H arbitration) is the curator ad litem for Dr Els Thomas, a young medical practitioner from Belgium, who was seriously injured in a motor collision near Cape Town

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A on 8 October 1996 while on vacation in South Africa. The second respondent (the second claimant in the arbitration) is her father, Mr RRJ Thomas, acting as her duly appointed 'bewindvoerder' (equivalent of a curator bonis) in Belgium. (In what follows I refer to the respondents individually by name and collectively as 'the claimants'.) The arbitrator, senior counsel at the Cape bar, has been joined as the third respondent. B He abides the decision of the court and has played no active role in these proceedings.

Factual background

[3] Dr Thomas had commenced her own practice near Antwerp in C Belgium not long before the accident happened. As a result of the injuries sustained in the collision, she suffers from mental, physical and psychological handicaps which prevent her from practising as a medical doctor and from being gainfully employed at all. After the appointment of a curator ad litem to represent her, action was instituted in the Cape D Town High Court against the Fund to recover damages, inter alia, in respect of the cost of medical care, the cost of accommodation, and loss of earning capacity in respect of Dr Thomas. That litigation was in due course settled on the basis that the Fund admitted liability for 70 percent of the damages suffered by Dr Thomas due to her injuries. By agreement between the parties the quantum of her claim was thereupon referred for E determination by way of arbitration in terms of the Act.

[4] The hearings relating to the quantum of the claim took place before the arbitrator in Belgium over three sessions during February 2003, August/September 2003, and September 2005, before final argument was addressed to the arbitrator during March 2006. He made an interim F award on 15 June 2006, as well as a further (final) award on 19 September 2006.

[5] At the heart of the dispute between the parties lies the entitlement of Dr Thomas to certain benefits in terms of the Belgian social security system and the question whether any such benefits should be deducted G from the damages payable by the Fund. According to Professor Guido van Limberghen, professor in Social Security Law at the Vrije Universiteit Brussel, who submitted an expert report on behalf of the claimants, self-employed persons in the position of Dr Thomas qualify for social security benefits consisting of medical and 'invalidity' (disability) insurance; H a family benefit insurance; pension insurance; and insolvency insurance. The social security system was established by legislation and administered by the state. It is compulsory and regulated by public legislation, not by private contract.

[6] The social security scheme for medical insurance is administered through insurance institutions, of which the Onafhankelijk Ziekenfonds I is one. Dr Thomas is a member of the Onafhankelijk Ziekenfonds and has received benefits from it arising from the injuries sustained in the collision. Part of those benefits relate to compulsory cover, and the remainder to optional cover she enjoyed under those schemes.

[7] The fact that the accident occurred in South Africa does not deprive J Dr Thomas of the right to the assistance of the Belgian medical cost

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insurance for the self-employed. This entails a right to compensation for A the treatment she received in a South African nursing institution and the treatment she subsequently received after her return to Belgium.

[8] She is also entitled to employment disability benefits for the period that she was treated in South Africa and for the period after her return to Belgium. Under Belgian law the statutory insurance (or social B security) institutions are obliged to pay compensation to Dr Thomas in anticipation of recovery of damages from any accountable third party or its insurer involved. The Belgian insurance institution (in this case the Onafhankelijk Ziekenfonds) is entitled to recover such compensation from the wrongdoer if the accident occurred in Belgium or in a country that recognises its right to recover, of which South Africa is not one. C

[9] It appeared, further, that there is no entitlement to benefits once actual compensation has been received from an accountable third party. Thus Dr Thomas's right of recovery against the Belgian scheme will fall away once she receives compensation from the Fund. There is a D statutory duty on a claimant to keep the relevant insurance institution fully informed as to the existence of claims against wrongdoers and diligently to pursue such claims. In this regard Professor Van Limberghen expressed the following view regarding the possibility of Dr Thomas recovering double compensation in respect of her injuries: E

"To enable the [Belgian] insurance institution to recuperate the compensation of the medical and invalidity insurance, to prevent doctor Thomas from being compensated twice and to prevent the Road Accident Fund from escaping its obligations towards doctor Thomas, the only solution is an agreement entered into between doctor Thomas and the Belgian insurance institution. In that agreement doctor Thomas F has to undertake to repay the compensation she receives from the Road Accident Fund to the insurance institution insofar as it covers the compensation that she had already received from the insurance institution.'

[10] The evidence further revealed that Mr Thomas, on behalf of himself and his daughter, had in fact furnished an undertaking to refund G to the Belgian insurance institutions such benefits as Dr Thomas may receive from the Fund for the selfsame loss.

[11] Based on the above evidence the Fund took the view, notwithstanding the undertaking mentioned above, that the benefits received and to be received by the claimants from the various social security funds fall to H be deducted from the damages to be awarded to the claimants.

[12] The Fund's view was resisted by the claimants, relying, inter alia, on the judgment of Scott J in Zysset and Others v Santam Ltd. [2] In that case the four plaintiffs, all Swiss citizens domiciled and resident there, were injured in a motor collision in Namibia. They received financial I benefits from one or other of two legislatively constituted compulsory social insurance schemes in Switzerland, whose object was the protection of the entire population of Switzerland against certain consequences of

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A disease and accident. They sued the defendant for damages as the insurer, under the Compulsory Motor Vehicle Insurance Act 56 of 1972, of the other motor vehicle involved in the collision. The defendant admitted the negligence of the driver of the insured vehicle, but claimed that the financial benefits received from the two social insurance schemes B had to be deducted from the damages they had sustained. It appeared that the plaintiffs had entered into an agreement with the Swiss insurance schemes that they would, in the event of the plaintiffs receiving the full amount of their damages, repay to the schemes the compensation received from those schemes. The issue before the court was whether or not the financial benefits from the Swiss schemes were to be deducted C from the damages to be awarded by the court in the actions against the defendant.

[13] The court held that there could be no question of a deduction if the plaintiffs were not doubly compensated, and the effect of the agreement was that the plaintiffs would not be doubly compensated if they D were awarded their full damages, since they would then have to repay to the Swiss schemes whatever they had received from them in benefits in respect of their patrimonial loss; further, that it was irrelevant that the plaintiffs had not been legally bound to enter into the agreement. [3]

E [14] The court accordingly issued an order declaring that, with regard to the claim of each plaintiff, no deduction from the damages as finally determined by the court was to be made in respect of any amount or any portion thereof which was or is to be received from the Swiss schemes and which in terms of the agreement fell to be repaid to the Swiss schemes. [4]

The application in terms of s 20(1) F

[15] It is apparent from the above synopsis that the same, or similar, questions that arose in Zysset also arose in the present case. On the face of it, therefore, Zysset would constitute binding authority in respect of the G issues to be decided in the present arbitration. However, it was contended on behalf of the Fund that Zysset had been wrongly decided. For this reason the Fund sought an opportunity of persuading the court of its view. It accordingly asked the arbitrator in terms of s 20(1) of the Act to state the following questions of law for the opinion of the court in the H form of a special case:

'1.1

Whether the value of any of the benefits referred to below received or to be received by the first and/or second claimants, or anyone appointed as curator bonis or bewindvoerder on behalf of Dr Els Thomas, should be excluded or deducted from any damages to be awarded to the Claimants or not:

1.1.1

I Any benefits received or receivable from the Belgian...