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Motor Vehicle Insurance Fund v Kopi (Civil Appeal No. 36 of 202) [2003] BWCA 8 (1 January 2003)

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IN THE COURT OF APPEAL OF BOTSWANA
HELD AT LOBATSE
COURT OF APPEAL CIVIL APPEAL NO. 36 OF 2002 HIGH COURT CIVIL CASE NO. 2234 OF 2001
In the matter between
APPELLANT
MOTOR VEHICLE INSURANCE FUND
VERSUS
RESPONDENT
SHINEY PHATSIMO KOPI
Mr. Carr-Hartley for the appellant Mr. H. Assey for the respondent
JUDGMENT
CORAM:   TEBBUTT J.P.
LORD SUTHERLAND J.A. GROSSKOPF J.A.
LORD SUTHERLAND J.A.
On 20th April 1999 the respondent sustained serious injury as a result of a road traffic accident. A claim for compensation was lodged on her behalf against the appellant Fund on 24th February 2000. Thereafter nothing appears to have happened until 30th May 2001, when the appellant sent a letter repudiating the respondent's claim. On 27th June 2001 the respondent registered a summons with the High Court seeking judgment in the sum of One Million pula, which summons was served on the appellant on 25th July 2001. The appellant lodged a special plea that the claim had prescribed in terms of section 21 of the Motor Vehicle

Accident Fund Act 1998. The matter came before Horn J. who dismissed the plea, and this appeal is against that decision.
The procedure for making a claim against the Fund is set out in section
19 of the 1998 Act, legal proceedings are dealt with by section 20, and
section 21 makes provisions relating to prescription. Before trying to
make sense of these three sections it is instructive to note the legislative
history. In 1986 the Motor Vehicle Accidents Act was passed in South
Africa. Sections 14 and 15 of that Act dealt with prescription and
procedure. Also in 1986 the Motor Vehicle Insurance Fund Act Cap
69:02 was passed in Botswana. Sections 15 and 16 of that Act deal with
prescription and procedure. The respective provisions are in almost
identical terms. In Mpelega v. Motor Vehicle Insurance Fund [1997] BLR
130, Schreiner J.A. said:
"No doubt it is desirable that legislation should as far as possible encourage parties to third party motor vehicle insurance disputes to reach a negotiating position before the issue of a writ of summons with the consequent legal costs ... But the provisions of the present legislation have, in the pursuit of this worthy object, become far too complicated and obscure. There has been strong criticism of the form and draftsmanship of similar legislation in South Africa. This court associates itself with this criticism. It should not be beyond the skill of a draftsman to express clearly the contents of section 15(1) and (3) and sections 16(1) and (2)."
Despite the criticisms of the draftsmanship, it is at least possible to ascertain a coherent and sensible scheme. A right to claim against the Fund arose as soon as a person was injured in a road traffic accident. That right, if not exercised, prescribed after two years. If the right was
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exercised and a claim in proper form was lodged, prescription was suspended until after the expiration of a further period of three months from the date of intimation to the claimant of repudiation of liability or an offer of settlement. The logic of this scheme is that it was the right to claim that was the subject of prescription. Once that right was exercised and a claim was made, no question of prescription could arise until the Fund intimated its final determination. What then started to run was a new prescriptive period of three months during which the claimant could raise legal proceedings to challenge the determination. If no such proceedings were raised within that three months period the determination would be final. If that legislation had remained in force, the respondent's claim and her right to raise the present action would not have been extinguished by prescription.
In 1998 Cap 69:02 was repealed and the Motor Vehicle Accident Fund
Act No. 6 of 1998 was passed, the date of commencement being 30
August 1998. Section 19 (1) prescribes:
"19. (1) A claim for compensation against the Fund shall be made in the prescribed form and shall include duly completed medical reports and such other relevant information and particulars concerning the vehicle accident, injury or death giving rise to the claim as required on such form or as may be required in terms of the regulations made under this Act."
The remaining subsections provide for the nature of the information to be provided by a claimant and provisions relating to false claims. Sections 20 and 21 prescribe:
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(1)      Legal proceedings to enforce any claim under
this Act may be instituted in a court of
competent jurisdiction upon expiry of a period of
six (6) months after completion of the
procedures set out in section 19:
Provided that such proceedings may be instituted at any time after the Fund has made a final determination on the claim subject to the limitations and provisions of section 21.
(2)    
Where such legal proceedings are concerned with an issue of procedure, costs or a dispute as to the amount of compensation awarded such proceedings shall be by way of review and in such event the claimant shall first submit a written statement to the Fund setting out the reasons for dissatisfaction or complaint to which the Fund shall respond in writing within fourteen (14) days.
(3)    
In all other instances such proceedings shall be by way of action for an order directing the Fund to proceed to make a determination on the claim and award compensation in accordance with the provisions of this Act.
(4)    
In any legal proceedings the Fund itself, as represented by its servants, shall be entitled to act on its own behalf and to appear in any court and to sue out, serve and receive service of process.

(1)    
Notwithstanding the provisions of any other law relating to the prescription of claims, but subject to the provisions of subsections (2) and (3), the right to claim compensation from the Fund shall become prescribed upon the expiration of a period of two (2) years from the date of the vehicle accident giving rise to the claim.
(2)    
Prescription of a claim under this Act shall not run against any person

 (a)     whilst such person is a minor;
(b)    
whilst such person is detained as a patient in terms of the provisions of the Mental Disorders Act;
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(c) whilst such person is under curatorship due to mental disorder.

(3)      Prescription of a claim under this Act shall be
suspended for a period of three (3) months from
the date of delivery, to the claimant or agent, of
a notification -
 (a)    
repudiating liability; or
 (b)     conveying an offer of settlement,
Provided that in respect of a claim which has been submitted in full accordance with the provisions of section 19, the running of prescription may be suspended by mutual agreement between the Fund and the claimant, or his agent, which agreement shall be reduced to writing before taking effect.
(4)      In respect of any prescribed claim, the court
may grant the claimant concerned, on
application, the right to institute an action for
enforcement of the said claim provided that -
(a)    
it is satisfied that special circumstances exist as to the reason for the claim not having been submitted before becoming prescribed;
(b)    
the application is brought not later than three months after the claim became prescribed; and
(c)    
the claimant concerned provides security for costs to the satisfaction of the court.
(5)      The right to institute any action granted in
terms of subsection (4) shall be exercised within
a period of three months from the date on which
such right is granted, failing which such right
shall lapse."
If by any chance one of the purposes of this Act was to remedy the defects in draftsmanship of its predecessor, the exercise can only be
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described as a dismal failure. Section 20(1) presumably implies that legal proceedings to enforce a claim will be incompetent if raised before the expiry of the six months period unless there has been a final determination within that period. As under the new regime there is no provision that prescription is suspended when a claim is lodged, it would seem to follow, on the appellant's construction of the Act, that for practical purposes the prescriptive period is reduced to eighteen months. If a claim is lodged nineteen months after the accident, it may prescribe before the claimant is permitted to institute an action to prevent the running of prescription, which would be a fairly bizarre situation. It was suggested that under the proviso to section 21(3) the running of prescription after a claim has been made can be suspended by mutual agreement, but nothing is said about what the position would be if the Fund declined to enter into such an agreement. Under section 15(4) of the old Act, the court could provide redress if the appointed agent was not prepared to waive its right to invoke prescription, but under section 21 (4) of the new Act the court can only grant redress in a situation when no claim has been submitted during the prescriptive period. I shall have further comment to make about the proviso to section 21(3) later. I also leave aside for the moment the proviso to section 20(1). Section 20(2) and (3) provide further obscurity. Section 20(2) deals with issues of procedure, costs and a dispute about the amount of compensation. These issues do not include an attempt to overturn a determination to repudiate liability. Section 20(3) starts "In all other instances ...", so an attack on repudiation must come within this subsection. However, it is
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quite apparent that this subsection cannot be of any value because the proceedings have to be an action for an order directing the Fund to make a determination. This is hardly of any assistance when the Fund has made a determination. As no point however is taken against the competency of the present action, I do not have to decide whether it is brought under section 20 (2) or 20(3) or is a free standing action not brought under section 20 at all.
I move now to section 21, the sidenote of which is "Prescription of right to claim." Section 21(1) has the rare merit in this statute of being clear and comprehensible. It says that the right to claim compensation prescribes after two years. This is a perfectly reasonable provision to prevent the Fund from being faced with stale claims. What is important to note however is that it is the right to claim that prescribes, not the claim itself. There is a crucial distinction between a right to claim and a claim. The right is something which requires to be exercised. It is exercised when a formal claim is submitted in compliance with the provisions of section 19. The right to claim thereafter ceases to have any value or meaning because the exercise of the right exhausts it. Logically therefore the prescription period which affects the right to claim comes to an end by the submission of a valid claim. This interpretation may receive some support from section 21(4). It would be strange to provide redress when no claim at all has been submitted timeously, but to fail to provide redress when a perfectly valid claim has been submitted but the Fund has delayed the determination of it until after the prescriptive period
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expires. This might indicate that a claim does not prescribe at least until sometime after its determination when the right to enforce it may prescribe.
Moving to the next stage, what if anything, is meant by "prescription of a claim" in section 21(3)? It certainly cannot be the same as prescription of a right to claim, which this section purports to be dealing with, because it is dealing with a period after a determination has been made by the Fund and that in turn necessarily implies that a claim has been made. In terms of section 4(1) of the Prescription Act Cap 13:01 "Extinctive prescription is the rendering unenforceable of a right by the lapse of time." In general, prescription is interrupted inter alia by service of a process whereby action is instituted or submission to arbitration. In my opinion the valid submission of a claim under section 19 is equivalent to service of a process. It is the only step which a claimant can take as he cannot raise an action against the Fund without first submitting his claim under section 19. If that is so, the claim is the equivalent of an action. I know of no way in which an action can prescribe. Similarly I find it difficult to see how a claim under section 19 can prescribe, particularly when the time taken to process the claim is entirely outwith the control of the claimant and entirely within the control of the appointed agent. Once the claim has been determined however, it is a perfectly reasonable provision to limit the period to three months within which an action can be raised to challenge the determination or otherwise enforce the claim. Apart from the two year
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prescription on the right to claim, the only other attempt to provide for prescription is contained in section 21(3). Where that subsection talks of the prescription of a claim being suspended for three months, I am of opinion that the only sensible construction of what is otherwise a meaningless concept is that at the expiry of that period the right to take legal proceedings to enforce the claim will be lost by prescription. That construction would then also make sense of the proviso to section 20(1). I should finally mention the proviso to section 21(3). It will be recalled that it was suggested that this proviso could be used to prevent a claim from prescribing before the appellant made a final determination. In my opinion, however, that argument cannot succeed. A proviso to any section or subsection of an Act provides for a limitation, expansion or explanation of the section or subsection to which it is attached. The proviso is therefore only relevant to the provisions of section 21(3). That subsection deals only with the three months period after the final determination and accordingly the proviso can only deal with that period. This makes a certain amount of sense in that the whole concept of this Act is to provide a means whereby claims for damages can be dealt with by negotiation rather than expensive and time wasting litigation. There is still room for negotiation even after the final determination, and it would be unfortunate if a claimant had to raise an action during the course of these negotiations just to prevent a time bar taking effect.
It follows from what I have said that the submission of the valid claim under section 19 in effect put an end to the prescriptive period relating to
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the right to claim and that there was accordingly no prescriptive period running as at the date of the final determination. The present action was raised within three months of that determination and accordingly was raised timeously. The appeal will accordingly be refused with costs.
DELIVERED IN OPEN COURT THIS     DAY OF JANUARY 2003
LORD SUTHERLAND JUDGE OF APPEAL
I AGREE
P. H. TEBBUTT JUDGE PRESIDENT
I AGREE
F. H. GROSSKOPF JUDGE OF APPEAL
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