UNIT 6: RESTRICTION OF RECOVERABLE DAMAGE

UNIT 6: RESTRICTION OF RECOVERABLE DAMAGE 53

Learning outcomes After completing Unit 6, you should be able to do the following: Know the circumstances in which the amount of damages recoverable by a third-party claimant from the RAF is restricted. Identify the single exception to the above-mentioned restriction. Explain the restriction relating to the claim of black widows of a customary union created by the Black Laws Amendment Act 76 of 1963. Readings Klopper (2008) Chapter 6 54

Introduction Read this paragraph on p. 215 and study section 18 of the RAF Act. 1. Outline of restrictions and exception 1.1 Applicable restricting provisions Carefully read this paragraph on pp. 215-216. (The RAF Amendment Act 19/2005 has now come into operation, causing sections 18(1) and 18(2)(a) to be respectively repealed and amended). 1.2 Contents of restrictions in terms of RAF Act, COIDA, and Defence Act Carefully read this paragraph on pp. 216-219. It is important to remember that the provisions of section 18(1) of the RAF Act do not apply to all passengers. The restrictions set out in sections 18(1)(a) and 18(1)(b) are only applicable when the death or injury is caused by the sole negligence of the driver of the motor vehicle in or upon which such passenger was being conveyed. If a passenger claimant s claim exceeds the amount recoverable from the RAF in circumstances where section 18(1) applies, the balance is recoverable from the wrongdoer. Where there is more than one passenger in a vehicle and section 18(1) applies, the restriction applies to each individual claim. A passenger claimant whose claim is restricted is entitled to the costs of instituting his or her third-party claim over and above the restricted amount. (Remember that section 18(1) has been repealed and section 18(2)(a) amended by section 7 of the RAF Amendment Act 19/2005 with respect to motor-vehicle accidents that took place on or after 1 August 2008). 1.3 Exception: persons rendering military service or undergoing military training Study pp. 219-220. Take note that the person who conforms to the set requirements will have an unrestricted claim against the RAF. (This exception is contained in section 18(1) which has been repealed in terms of the RAF Amendment Act 19/2005. 55

1.4 Apportionment of Damages Act 34 of 1956 Study this paragraph on p. 220. It is an important principle to remember that according to sections 1 and 2 of this Act, the damage of a third-party claimant whose fault contributed to the causation of his/her damage is subject to apportionment in the same ratio as his/her contributory fault. 2. Constitutionality of restrictions Read this paragraph on pp. 220-221. 3. Passengers 3.1 Introduction Read this paragraph on p. 221. A person can, of course, only be classified as a passenger if he/she is conveyed, and it is, therefore, of importance to understand what is meant by the concept conveyed. (Section 7 of the RAF Act 19/2005 has repealed section 18(1) and amended section 18(2) of the RAF Act 56/96). 3.2 Meaning of conveyed Study pp. 222-223. In terms of section 1 of the Act, convey includes entering or mounting the motor vehicle concerned for the purpose of being so conveyed. Klopper (p. 222) is of the opinion that in these circumstances the intention of a person to be conveyed will be conclusive to establish conveyance. The mere presence of a person in or on a vehicle does not necessarily mean that he/she is being conveyed. An intention to be conveyed must also be present. Normally the intention of a passenger to be conveyed and the driver of a motor vehicle to convey must be common before it can be said that a passenger was conveyed. With regard to section 1 of the Act, a person is regarded as still being conveyed while he/she is in the process of alighting from a motor vehicle. 56

3.3 Different classes of passengers distinguishable Study this paragraph on p. 223. Make sure that you are able to distinguish the classes of passengers set out in section 18(1)(a) and (b). 3.4 Exception: passengers who are undergoing military training or rendering military service Study pp. 224-225 and Fonjana v MMVA Fund and Another 2005(1) SA 26 (SCA). According to Klopper (p. 225), the test to determine whether a claimant was undergoing military training or rendering military service is whether such a person was, in terms of the provisions of the Defence Act 44 of 1957 (or any other Act), at the relevant time under a duty to do so and consequently was under the control, authority, and discipline of the military or other authority. In terms of section 22(8) of the Defence Act 44 of 1957, time spent travelling to or from a training facility in order to commence military training or service or after such training or service has been completed is not deemed to be part of any period of military service. 3.5 Passengers conveyed for reward (Section 18(1) has been repealed by section 7 of the RAF Amendment Act 19/2005 causing the restriction that was placed on the claim of this type of passengers under certain circumstances to be abolished with regard to motor vehicle accidents that took place on or after 1 August 2008) Study pp. 226-234 and RAF v Samela 2002(1) SA 578 (SCA). Section 18(1)(a) and 18(1)(b) distinguish between so-called commercial and social or gratuitous passengers. Commercial passengers or their dependants who are injured or whose breadwinners are killed by the sole negligence of the driver of the vehicle in or on which they were travelling are entitled to claim R25 000 special and general damages plus the cost of recovery of the claim. If the amount of the claim exceeds R25 000, the balance has to be recovered from the wrongdoer or his/her employer who may be vicariously liable. 57

A prior legally binding agreement or other agreement is not a definite requirement for conveyance to be for reward. The reward must have been voluntarily paid by the passenger or another person on his or her behalf. The arrangement or agreement need not have a profit motive in order to constitute reward. The reward must be a quid pro quo for the conveyance. The reward need not necessarily be exact compensation or remuneration for the actual cost of such conveyance. The reward can take on any form, on condition that it must have monetary value and that it either fully or partially compensates for the conveyance. Klopper (p. 229) points out that the reward must be paid to the supplier of the motor vehicle used for the conveyance or to a person authorised by such a supplier to drive the vehicle on the supplier s behalf. There must have been a common intention of both the passenger and the driver to be conveyed for reward and to convey for reward. The payment of illegal reward will result in the concerned passenger not being conveyed in terms of section 18(1)(a)(i) but possibly in terms of the remaining subsections of section 18(1). In most of the circumstances, such a passenger will end up as a social passenger conveyed in terms of section 18(1)(b). Such a passenger s claim is restricted to R25 000 special damages plus the costs of recovery thereof. The reward can only be illegal if it is illegal in terms of any law relating to the control of transportation services. The Road Transport Act 74 of 1977 regulates transportation services. According to this act, a conveyor must apply for a public permit to undertake public road transportation within an area (for example, a taxi). If conveyance is done without any permit, it will be illegal in terms of the above-mentioned act. For some time now, it has, however, been unclear what the position is where a passenger was conveyed in terms of a public transportation permit, but where the conveyance exceeded the authority of such a permit (for example, where more passengers than authorised by the permit were conveyed). Take note of the dissenting decisions on this point on pp. 230-231 of your prescribed textbook. In view of the Supreme Court of Appeal s decision in RAF v Samela 2002 (1) SA 578 (SCA), it would appear that illegality resulting from a contravention of a public transportation permit does not render the reward paid illegal. For reasons set out by him on p. 232, Klopper submits that the claim of a paying motor cycle passenger is not excluded, but restricted. (Section 19(b) has been repealed by section 8 of the RAF Amendment Act 19/2005. This means that the claim of a paying motor-cycle passenger is not excluded with regards to motor-vehicle accidents that took place on or after 1 August 2008). If more than one passenger is injured or killed in the same accident, the claim of each claimant (or dependant) will be limited to a maximum of R25 000 special or general damages plus costs. If a claim exceeds the amount of R25 000, the balance thereof must be recovered from the wrongdoer. 58

Whereas the burden of proof that a claimant was conveyed for reward in terms of section 18(1)(a)(i) rests with such claimant, the burden of proof to show that the reward paid was illegal rests with the RAF. 3.6 Passengers conveyed in course of lawful business of owner of motor vehicle concerned (Because section 18(1) has been repealed by section 7 of the RAF Amendment Act 19/2005, the restriction that was placed on the claim of this type of passengers under certain circumstances has been abolished with regard to motor vehicle accidents that took place on or after 1 August 2008). Study pp. 234-241 and RAF v Samela 2002 (1) SA 578 (SCA). The requirements that have to be met before a person will have a claim in terms of section 18(1)(a)(ii) are summarised on p. 234. No definition of business appears in the Act, and it is, in fact, very difficult to formulate such a definition that would give expression to the concept as used in section 18(1)(a)(ii) of the Act. Every case has to be considered on its own merits. To give the third party claimant the widest possible protection, a wide rather than a restrictive interpretation of the concept of business should be applied. With regard to the nature of the business, Klopper (pp. 235-236) points out that it can be any activity that constitutes an active profession, or occupation that has an altruistic or philanthropic nature, content or aim but does not include any social or household activities or excursions for pleasure. A profit motive is not required for an entity to constitute a business. The business need not be continuous. Conveyance must have taken place in the course of the lawful business of the owner of the vehicle concerned. The question arises whether the conveyance of a passenger by a taxi contrary to the provisions of a public transportation permit issued in terms of the provisions of the Road Transportation Act 74 of 1977 would render the business of the owner of the vehicle concerned (taxi) illegal. Take note of the dissenting decisions referred to by Klopper on pp. 236-237. Klopper (pp. 237-238) submits that it was the intention of the legislator that the business of a taxi owner who operates in contravention of section 31 of the Road Transportation Act 74 of 1977 should be regarded as being illegal. He, furthermore, suggests that the illegality may even result from a single illegal conveyance and that it will be in respect of that particular conveyance. 59

There must be a link between the presence of the claimant passenger in or upon the concerned vehicle and the business of the owner. Carefully read through the examples on pp. 238-240, as they will help you to establish whether a passenger was conveyed in the course of the business of the owner or not. (See however RAF v Samela 2002 (1) SA 578 (SCA) especially pp. 582 I to 584 G.) A passenger who has been conveyed in the course of the business of the owner of the motor vehicle concerned and has been injured or killed by the sole negligence of the driver of the motor vehicle concerned has a restricted claim of R25 000 special and general damage plus the cost of recovery thereof against the Fund. If the claim exceeds the amount of R25 000, the balance has to be recovered from the wrongdoer. Where more than one passenger is injured or killed in the same accident, the claim of each claimant (dependant) will be limited to R25 000 special or general damages plus costs. Again, if the damage sustained exceeds the amount of R25 000, the balance will be recoverable from the wrongdoer. As explained by Klopper (p. 241), the burden to prove that a passenger claimant who was injured or killed was conveyed in the course of the lawful business of the motor vehicle concerned rests with such claimant. 3.7 Passengers who are employees of owner or driver of motor vehicle concerned and conveyed in course of employment, but who are not subject to section 18(2) (Section 18 has been repealed by section 7 of the RAF Amendment Act 19/2005 and therefore the restriction that was placed on the claim of this type of passengers under certain circumstances has been abolished with regard to motor vehicle accidents that took place on or after 1 August 2008). Study pp. 241-242. The claim of this type of passenger against the Fund is also restricted to R25 000 special and general damages plus the cost of the recovery thereof. Damage exceeding R25 000 must be recovered from the wrongdoer. The test is not whether the employee acted in the course of his/her employment, but rather whether he/she was conveyed in the course of his/her employment. This is a factual question. Make sure that you know the requirements that have to be met in order for section 18(1)(a)(iii) to apply. 60

3.8 Passengers conveyed in pursuance of a lift club (The restriction that was placed on the claim of this type of passengers under certain circumstances has been abolished with regard to motor vehicle accidents that took place on or after 1 August 2008 as a result of section 18(1) being repealed by section 7 of the RAF Amendment Act 19 of 2005). Study pp. 242-244. In terms of section 18(1)(a)(iv), the claim of this type of passenger is restricted to R25 000 special and general damages plus the cost of recovery of such damage. Damage exceeding R25 000 must be recovered from the wrongdoer. Take note that a lift club can only be operated by making use of a motor car that is a motor vehicle in terms of section 1 of the Act, with the added restriction that it must be designed to carry a maximum of nine persons plus the driver. The two types of lift clubs that can be distinguished in the Act are set out on p. 243 of your prescribed textbook. Each passenger or each dependant of a deceased passenger can individually claim a maximum of R25 000 special or general damages plus costs. Damage exceeding R25 000 must be recovered from the wrongdoer. The burden to prove that a passenger claimant who was injured or killed was conveyed in the course of a lift club vehicle rests with such claimant. 3.9 Passengers (not being subject to COIDA of 1993) who are not conveyed for reward, not in the course of lawful business of owner, not in the course of employment with owner or driver, and not in course of lift club (Section 18(1) has been deleted by section 7 of the RAF Amendment Act 19/2005 resulting in the restriction that was placed on the claim of this type of passengers under certain circumstances to be abolished with regard to motor vehicle accidents that took place on or after 1 August 2008). Study pp. 245-246. These passengers are referred to as social or gratuitous passengers. Such a passenger s claim is restricted to R25 000 damages limited to the special damage specifically mentioned in section 18(1)(b), plus the costs of recovery of such damage. In other words, this type of passenger does 61

not have a claim for general damages. Damage exceeding R25 000 must be recovered from the wrongdoer. Where more than one claimant is injured or killed in the same accident, each passenger or each dependant of a deceased passenger can individually claim a maximum of R25 000 special damages plus costs. Damage exceeding R25 000 must be recovered from the wrongdoer. The burden to prove that a passenger claimant who was injured or killed was conveyed as a social or gratuitous passenger rests with such claimant. 4. Employees 4.1 Introduction Read this paragraph on pp. 246-247. 4.2 Master and servant relationship Study pp. 247-248. The question that is of relevance here is not whether an employee acted in the execution of his/her duties, but whether he/she was injured or killed in the course of his/her employment. The principles to take into consideration when determining whether the injury or death took place in the course of employment will, therefore, be those of the contract of master and servant. Whether a relationship of master and servant exists is a question of fact. All the surrounding circumstances as well as the relevant requirements have to be taken into account to answer this question. 4.3 Employees entitled to compensation in terms of Compensation of Occupational Injuries and Diseases Act of 1993 (COIDA) Carefully read pp. 248-249. 62

4.4 Employees who are passengers in the employ of driver or owner, but not entitled to compensation in terms of COIDA of 1993, injured in course of employment (See paragraph 3.7 above for the effect that the enactment of section 7 of the RAF Amendment Act 19/2005 has had on inter alia section 18(1)(a)(iii) of the RAF Act 56 of 1996). Carefully read pp. 249-255. To determine whether an employee was conveyed and injured in the course of his/her employment, an extensive approach is used. Factors such as the provisions of the concerned contract of employment and the principles of the law of delict relating to vicarious liability are utilised to answer this question. You must also take note of the following that could have an influence on the question whether conveyance took place in the course of the employee s employment: Did the conveyance take place because of the direct instructions of the owner or driver? Did the conveyance take place in direct conflict with the instructions of the employer? Did conveyance take place in conflict with the instructions of the employer, but in consequence of instructions given by an authorised intermediary? Did the conveyance have a direct link with the duties of the employee in terms of his/her contract of employment? Where conveyance of the employee took place while he/she was on duty, but not within the scope of his/her contract of employment Does conveyance to and from an employee s place of employment constitute conveyance in the course of his/her employment? Does conveyance to and from work by means of a vehicle supplied by the employer constitute conveyance in the course of employment? 63

4.5 Employees who are passengers in employ of owner or driver of motor vehicle and entitled to compensation in terms of COIDA of 1993 (Take note that section 18(2)(a) has been amended by section 7 of the RAF Amendment Act 19/2005 in respect of motor vehicle accidents that took place on or after 1 August 2008. As a result of this amendment this type of passenger s claim against the RAF is not restricted anymore but compensation received by the claimant in terms of the COIDA must still be deducted from said third party claim instituted against the RAF). Study pp. 256-261, section 18(2) of the RAF Act and RAF v Maphiri 2004 (2) SA 258 (SCA). This type of passenger s claim is restricted in terms of section 18(2) if the following requirements are complied with: The claimant must have been conveyed and injured or killed by the sole negligence of the driver of the vehicle concerned. The claimant must be in the employ of the owner or the driver of the motor vehicle concerned. The claimant must be entitled to compensation in terms of the COIDA. In terms of COIDA, employees or their dependants who are defined as such in said act are entitled to compensation if they are injured or killed in the course of their employment. They must claim from the Compensation Commissioner in terms of COIDA. In other words, if an employee is injured or killed in the course of his/her employment in a motor vehicle accident, a possible interaction between the RAF Act and COIDA arises. The purpose of this interaction is basically to prevent an employee from being compensated for the same damage in terms of both of these acts. In terms of section 18(2) of the RAF Act, this type of passenger s claim is restricted to the difference between: the third-party claim such claimant would have had were it not for the provisions of section 18(2) (in other words, his/her total common law delictual claim) or R25 000, whichever is the lesser amount, and the compensation he/she is entitled to in terms of the COIDA. For example, if the claimant passenger sustained injuries in a motor vehicle accident in the course of his/her employment amounting to R100 000, and he/she has already received R18 000 from the Compensation Commissioner in terms of the COIDA. What amount is he/she entitled to claim from 64

the Fund in terms of the RAF Act? As explained above, you take such claimant s total common law claim (which is R100 000 in our example) or R25 000, whichever is the lesser amount. You, therefore, take R25 000, and from this amount you deduct the R18 000 that was received from the Compensation Commissioner. In other words, R25 000 R18 000 = R7 000. The passenger claimant is, therefore, entitled to claim an amount of R7 000 from the Fund in terms of the applicable principles. Another important section is section 35 of the COIDA. The gist of this section is basically that when an employee is injured or killed in the course of his/her employment as a result of his/her employer s fault, such an employee or his/her dependant is not entitled to institute a common law delictual claim for damages against his/her employer. Because of the contents of section 19(a) of the RAF Act, this would mean that such an employee would also not have a third-party claim against the Fund in the following situation: where he/she sustained injuries as a passenger in a motor vehicle accident while being conveyed in a motor vehicle driven by his/her employer. Conveyance took place in the course of the claimant passenger s employment, and the accident was the result of the sole negligence of the employer. Under these circumstances, the passenger will have no delictual claim against his/her employer (section 35 of the COIDA) and no claim against the RAF (section 19 of the RAF Act). He/she will only be entitled to claim special damages from the Compensation Commissioner in terms of COIDA. If, however, in the above-mentioned set of facts the concerned motor vehicle was driven by a coemployee, the claimant passenger will have the following claims: Against the RAF: in terms of section 18(2) of the RAF Act, the difference between R25 000 or his/her total common law delictual claim, whichever is the lesser; and the compensation to which the claimant is entitled in terms of COIDA. Against the Compensation Commissioner: the compensation for special damages the claimant is entitled to in terms of COIDA. Against the wrongdoer (co-employee): the balance of his/her claim that could not be recovered from the RAF and the Compensation Commissioner. This would be a delictual claim in terms of common law. Where this type of passenger s claim is subject to apportionment of damages in terms of the Apportionment of Damages Act 34 of 1956, the apportioned (reduced) claim must be used to calculate the amount that can be recovered from the RAF in terms of section 18 (2) of the RAF Act. In RAF v Maphiri 2004 (2) SA 258 (SCA) it was decided that the so-called like from like principle is wrong and should therefore not be followed. Should the amount of compensation received by the claimant passenger in terms of the COIDA exceed his/her third-party claim or R25 000 (whatever the case maybe), his/her claim against the RAF is extinguished. He/she will then only receive compensation in terms of the COIDA. The burden rests on the third-party claimant to prove that conveyance was in the course of employment. If it is alleged by the RAF that section 18(2) is applicable to a claimant s claim, they will have to prove it. 65

4.6 Employees not being passengers and who are entitled to compensation in terms of COIDA of 1993 Study pp. 261-262 and RAF v Maphiri 2004 (2) SA 258 (SCA). According to the principles set out in your textbook, this type of claimant is entitled to recover whatever damage he/she will be entitled to in terms of section 17 read with section 21 of the RAF Act less the compensation recovered in terms of the COIDA. Here we are dealing with the situation where the claimant, who is entitled to compensation in terms of the COIDA, either was not a passenger or where he/she was a passenger in a vehicle not owned by his/her employer. It is, furthermore, a requirement that the wrongdoer must not be the claimant employee s employer (Klopper: 262). The effect of section 36(2) of the COIDA is that the compensation paid in terms thereof is deducted from the employee s claim against the wrongdoer. 4.7 Members of South African National Defence Force not entitled to compensation in terms of COIDA of 1993, but in terms of Defence Act of 1957 Study pp. 263-264 and section 18(3) of the RAF Act. To prevent double compensation, the amount these members of the South African Defence Force are entitled to claim from the RAF is restricted to the difference between their third-party claim and the compensation received in terms of the Defence Act of 1957. To fall into this category of claimants, the person must be a member of the South African National Defence Force and must be entitled to compensation in terms of the Defence Act 44 of 1957, but not the COIDA of 1993. The members of the SANDF who are envisaged here are those who can be classified as soldiers. 5. Funeral and cremation costs Study this paragraph on pp. 264-265. In terms of section 18(4) of the RAF Act, these costs are restricted to the necessary actual costs to cremate the deceased or to inter him/her in a grave. 6. Widows of a customary union Study this paragraph on p. 265. 66

7. Apportionment of damages Study pp. 265-270 and Van der Merwe v RAF and Another 2006 (4) SA 230 (CC) in which it was inter alia decided that marriage partners are inter partes liable to each other not only for nonpatrimonial but also for patrimonial damage based on personal injury. This part of the work is also dealt with in unit 5.4 of the manual. Please ensure that you understand how the criterion for apportionment is applied in practice. (See Klopper pp. 266-267 also the example contained in footnote 290). A passenger s neglect to wear a safety belt may qualify as negligence apportionable in terms of the Apportionment of Damages Act 34 of 1956, but only to the extent to which such negligence contributed to the causation of the damage. The application of this principle is explained on pp. 267-268 and footnotes 292 and 293 of your prescribed textbook. Activity 1 1. (a) (b) Identify the categories of passengers whose claims are limited in terms of section 18 of the RAF Act 56 of 1996. To what amount are their claims limited, and what type(s) of damages is/are these passengers entitled to claim? 67