[3] Future medical costs have, by agreement, been the subject of an undertaking by the RAF to pay 50% thereof and need not detain us.¹ The plaintiff was totally disabled for the period 6 September to 24 November 1996, and that gave rise to payment of compensation for total disablement for that period. It also gave rise to the loss of income. The Commissioner does not pay compensation for general damages such as pain and suffering.

[4] The appeal raises the question of the effect of s 36 of the COIA Act on the amount of the plaintiff’s claim against the RAF. At the time the section read as follows:²

‘Recovery of damages and compensation paid from third parties

(1) If an occupational injury or disease in respect of which compensation is payable, was caused in circumstances resulting in some person other than the employer of the employee concerned (in this section referred to as the 'third party') being liable for damages in respect of such injury or disease-

(a) the employee may claim compensation in terms of this Act and may also institute action for damages in a court of law against the third party; and

(b) the Compensation Commissioner³ or the employer by whom compensation is payable may institute action in a court of law against the third party for the recovery of compensation that he is obliged to pay in terms of this Act.

(2) In awarding damages in an action referred to in subsection (1) (a) the court shall have regard to the amount to which the employee is entitled in terms of this Act.⁴

(3) In an action referred to in subsection (1) (b) the amount recoverable shall not exceed the amount of damages, if any, which in the opinion of the court would have been awarded to the employee but for this Act.

(4) For the purposes of this section compensation includes the cost of medical aid already incurred and any amount paid or payable in terms of section 28, 54 (2) or 72 (2) and, in the case of a pension, the capitalized value as determined by the Compensation Commissioner⁵ of the pension, irrespective of whether a lump sum is at any time paid in lieu of the whole or a portion of such pension in terms of section 52 or 60, and periodical payments or allowances, as the case may be.’

[5] The section replaced a similar section, s 8, contained in the repealed Workmen’s Compensation Act 30 of 1941, namely s 8.. These sections have been the subject of a number of decisions, also of this Court, all culminating in an encyclopaedic judgment in the Court below⁶ in which all or nearly all of them were subjected to a detailed analysis. Instead of interpreting prior judgments I prefer to begin with the meaning of the section and then, if necessary, to turn to some of them. Particularly unhelpful, I find, are the recalculations done by the learned Judge in order to determine what some of them meant, simply because these recalculations raise issues that may not have been considered by those courts.

[6] In Jooste v Score Supermarket Trading (Pty) Ltd 1999 (2) SA 1 (CC) YJacoob J, speaking on behalf of the Court, gave this useful exposition of the general effect of the COIA:

‘[13] The purpose of the Compensation Act, as appears from its long title, is to provide compensation for disability caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment. The Compensation Act provides for a system of compensation which differs substantially from the rights of an employee to claim damages at common law. Only a brief summary of this common-law position is necessary for the purposes of this case. In the absence of any legislation, an employee could claim damages only if it could be established that the employer was negligent. The worker would also face the prospect of a proportional reduction of damages based on contributory negligence and would have to resort to expensive and time-consuming litigation to pursue a claim. In addition, there would be no guarantee that an award would be recoverable because there would be no certainty that the employer would be able to pay large amounts in damages. It must also be borne in mind that the employee would incur the risk of having to pay the costs of the employer if the case were lost. On the other hand, an employee could, if successful, be awarded general damages, including damages for past and future pain and suffering, loss of amenities of life and estimated 'lump sum' awards for future loss of earnings and future medical expenses, apart from special damages including loss of earnings and past medical expenses.

[14] By way of contrast, the effect of the Compensation Act may be summarised as follows. An employee who is disabled in the course of employment has the right to claim pecuniary loss only through an administrative process which requires a Compensation Commissioner to adjudicate upon the claim and to determine the precise amount to which that employee is entitled. The procedure provides for speedy adjudication and for payment of the amount due out of a fund established by the Compensation Act to which the employer is obliged to contribute on pain of criminal sanction. Payment of compensation is not dependent on the employer's negligence or ability to pay, nor is the amount susceptible to reduction by reason of the employee's contributory negligence. The amount of compensation may be increased if the employer or co-employee were negligent but not beyond the extent of the claimant's actual pecuniary loss. An employee who is dissatisfied with an award of the Commissioner has recourse to a Court of law which is, however, bound by the provisions of the Compensation Act. That then is the context in which s 35(1) deprives the employee of the right to a common-law claim for damages.

[15] The Compensation Act supplants the essentially individualistic common-law position, typically represented by civil claims of a plaintiff employee against a negligent defendant employer, by a system which is intended to and does enable employees to obtain limited compensation from a fund to which employers are obliged to contribute. Compensation is payable even if the employer was not negligent. Though the institution of the regime contemplates a differentiation between employees and others, it is very much an open question whether the scheme is to the disadvantage of employees.’

[7] The first and axiomatic principle, therefore, is that the object of the COIA Act is to provide ‘compensation’ for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment. ‘Compensation’ is not the same as ‘damages’, a distinction drawn clearly by s 36. There may be a complete overlap, as in the case of hospital and medical expenses (although for the general purposes of the COIA Act medical costs are not regarded as ‘compennesation’).compnesation’). There may also be a partial overlap, as in the case of loss of income (as a head of damages) and compensation for disablement under the COIAAct.. But then there may be no congruent relief such as in the case of general damages for pain and suffering, which are claimable under the lex Aquilia, and for which there is no corresponding head of compensation in the COIAAct..

[8] The second point, which tends to be overlooked, is that the Act is not for the benefit of third parties, such as the RAF, who are liable in delict; it is for the benefit of the employee and the employer, both who have to pay and ‘premiums’ have to be paid for this ‘insurance’. This means that the starting point of any litigation under s 36 is a determination of the third party’s liability. Some cases have referred to it as ‘common law liability’, a concept that gave the Court below some trouble. All it means is ‘delictual liability’ and what the courts have attempted to do by using the phrase was to distinguish between ‘compensation’ and ‘damages’. Once this is understood, an apportionment of damages under the Apportionment of Damages Act 34 of 1956 does not give rise to any problems or to another method of calculation.⁷ In this case the starting point is then the RAF’s liability for 50% of the plaintiff’s damages which is R51 166,33.

[9] The converse point has often been made and that is that s 36 does not increase the liability of a third party. Consequently, the full amount of its liability (in this case 50% of the plaintiff’s loss) has to be divided between the employee and the Commissioner. The employee gets the amount of those damages less the compensation paid and the Commissioner gets the compensation repaid, up to the limit of the plaintiff’s entitlement. The division of the RAF’s liability appears to me to be the nub of the appeal and that is why the RAF contends that the total of the Commissioner’s award should be deducted from its liability. On this basis it would be liable for R12 820,17 (R 51 166,33 minus R 38 346,17). The plaintiff, on the other hand, argues that a court should only have regard to the amounts paid by the Commissioner in relation to specific heads of damage to which these amounts relate and should therefore not be deducted from heads of damage to which they do not relate. This means that, in this case, the Court should only ‘have regard to’ or deduct the amount of R19 173,09 – 50% of the amount awarded by the Commissioner (which was R38 346,17) – as ‘the amount to which the employee is entitled in terms of this Act’ (s 36(1)(b)) from the delictual liability of the RAF of R51 166.33. The difference of R31 993,26 would then represent the RAF’s liability to the plaintiff.

With the plaintiff the Court below agreed.

[10] To simplify the plaintiff’s contention: Since the Commissioner did not award compensation for general damages, those cannot be taken into account in determining the plaintiff’s entitlement from the RAF. Medical expenses, on the other hand, may be taken into account (the Commissioner pays for them under s 73) as may be loss of income since the latter can be equated to a payment for disability (which is calculated with reference to the employee’s earnings: Schedule 4).

[11] Can one read this limitation into the section? I believe not. Those who believe differently, rely on the fact that the Legislature requires of a court ‘to have regard to’ the amount receivable from the Commissioner and point out that the court is not told to ‘deduct’ that amount. It is too late now to raise this argument, I believe, because this Court has held that ‘to have regard to’ means, in this context, ‘to deduct’.⁸ Schutz JA also mentioned two further principles underlying the section. They are:

‘The second is that in a case where a “third party” is involved the workman may be entitled, in the form of compensation plus damages, to the amount of his full common-law damages, but no more. The third is that the “third party” may be liable to the workman and the employer or commissioner taken together for the full amount of common-law damages, but no more.’⁹

[12] ] The second argument is based upon the hard luck case of a plaintiff who does not include in the claim against the third party a head of damages (say for medical costs) for which he had received compensation. In this event, it is argued, that it would be unfair to deduct the amount paid by the Commissioner for medical costs from an amount of damages that does not include a claim for those costs. In this context the term ‘like for like’ has been used.⁹

[] Before dealing with the example, I would suggest that one should read theThe the section again. It requires a court to deduct (‘have regard to’) to the ‘compensation’ to which the employee ‘is entitled’ under the Act – not part of the compensation or certain heads of compensation only – in determining the plaintiff’s employee’s entitlement vis-à-vis the third party. This is made abundantly clear by ss (4), which defines by way of extension the meaning of ‘compensation’ for purposes of the section.¹⁰ That ‘compensation’ must be deducted from the award of ‘damages’ (‘skadevergoeding’ has always been the Afrikaans rendition), and not from certain heads of damages.

[13] Milne J came to the same conclusion in Wille and Another v Yorkshire Insurance Co Ltd 1962 (1) SA 183 (D) 186D-187B, a passage worth quoting:

‘To my mind nothing was said in that case¹¹ nor in South British Insurance Co. Ltd v Harley, 1957 (3) SA 368 (AD), nor in Natal Provincial Administration v Buys, 1957 (4) SA 646 (AD), to which Mr. Harcourt also referred, which can possibly support the view that the “compensation” which the Commissioner “is obliged to pay” within the meaning of sec. 8 (1) (b) must be limited, with respect either to category or to amount, to items claimable both against the Commissioner and at common law. The provisions of sub-paras. (a) and (b) of sec. 8 (1) are interlocked and must be read together. They are designed to ensure, firstly, that there should be deducted from the amount of the workman's common law claim against the third party, if he makes one, the amount which it appears that the Commissioner is obliged to pay the workman under the Act; secondly, that the latter amount should be recovered in full by the Commissioner subject only to the third party's not having to pay more, in all, than the total amount of damages which the workman could have recovered from such third party if the Workmen's Compensation Act had not been passed . . .. Mr. Harcourt argued that where a workman had suffered, say, R2,000 damages for pain and suffering which he was prima facie entitled to recover from the third party, but nothing for estimated loss of future earnings, and was, at the same time, entitled to compensation under the Act in an amount of R2,000 for the loss of two legs, but still able to earn his living as before because his work did not require the use of his legs, it would be anomalous and unfair and, therefore, not contemplated by the Legislature, to hold, in effect, that the workman would be entitled to receive nothing for his pain and suffering. I find myself unable to agree that this result is anomalous or unfair. I cannot see any reason why the Legislature should have intended that a person, wholly innocent of fault himself, having a valid and available cause of action against a third party for damages so as to be entitled to claim from that third party for all the damage whatsoever that he has suffered and will suffer in future in consequence of his injuries, should receive more than the sum which represents that damage merely because he is a workman who, as such, is entitled to claim a sum of money from the Commissioner in respect of such injuries.’

[14] The second submission in support of the plaintiff’s argument is based upon the so-called ‘like from like’ principle which is said to have been derived from two judgments of this Court, namely Klaas v Union & South West Africa Insurance Co Ltd 1981 (4) SA 562 (A); Senator Versekeringsmaatskappy Bpk v Bezuidenhout 1987 (2) SA 361 (A). The ‘principle’ is said to have arisen in the following context: an employee is compensated by the Commissioner for medical expenses. In claiming damages from the third party he does not include a claim for them. In this event, it said, it would be unfair to deduct the amount paid by the Commissioner for medical costs from the damages claimed. In order to solve the conundrum, ‘like’ (medical costs paid by the Commissioner) is to be deducted from ‘like’ (a claim for medical costs by the plaintiff) and not from unlike (such as generals). The Court below applied the principle by deducting the compensation paid for past hospital expenses from the plaintiff’s claim under that head, which gave a minus figure; it deducted the compensation for disablement from the plaintiff’s claim for loss of income, which also gave a minus figure; and since no compensation was awarded for generals, there was nothing to deduct from the R30 000. The plaintiff was, accordingly, awarded that sum.

[15] The practical answer to the hard luck case (apart from the fact that lawyers should not be negligent in formulating claims)this type of case is not to be found in a ‘like from like’ principle but is to be found in the point made earlier, namely that the starting point of any litigation under s 36 is a determination of the third party’s gross liability, i.e. its gross liability.. The calculation is to be taken from there and not from the claimed amount. This is in accordance with the concluding statement of Van Heerden AJA in Klaas¹² where he said:

‘There is accordingly much to be said for the view that the compensation falls to be deducted from the total amount of the workman's common law damages even if he actually chose to claim a lesser sum.’

(Underlining added.) In other words, in determining the plaintiff’s award, a court has first to establish the defendant’s full liability, including the unclaimed medical costs. It then deducts from that amount the full compensation (including the medical costs) payable. Were it otherwise, the other principle mentioned earlier, namely that the Act is not intended to reduce the third party’s liability, would be violated. Then the unfairness will dissipate.

[16] I believe that I have indicated that the like from like principle cannot be reconciled with the wording of the section and that it is wrong. The judgment of the Court below proves that it leads to confusion and inconsistent results and should no longer be used. If one postulates the case where the Commissioner has paid compensation of, say, R10 000 and the employee suffered damages in a like amount, the Commissioner who, on a reading of the section, is entitled to recover ‘compensation that he is obliged to pay’ and not only some of it, would be entitled to recover the R10 000 and not only those amounts for which there are congruent heads. The employee would have no claim unless the damages suffered are more that R10 000.

[17] In any event, Klaas¹³ did not hold that there is a ‘like from like’ principle. On the facts of the case the principle as understood by the plaintiff did not arise not was it applied. The term was used in the following context by Van Heerden AJA (at 580H-581B):

‘It is clear that the Legislature did not intend the benefits received by a workman under the Act to be regarded as res inter alios acta. A Court is enjoined to have regard to such benefits, ie the compensation (including medical aid) that the Commissioner is obliged to pay and entitled to recover under s 8 (1) (b). In Bonheim v South British Insurance Co Ltd 1962 (3) SA 259 (A) at 266 OGILVIE THOMPSON JA pointed out that the precise meaning of the words ‘shall have regard to’ in s 8 (1) (a) is not entirely clear, but assumed that they mean ‘deduct’. However, there may be a good reason why the Legislature used the above words. If a workman received free medical and hospital treatment he may decide not to claim from the wrongdoer any amount in respect of such treatment. In such a case it would be inequitable to deduct from the damages established by him the amount relating to medical aid which the Commissioner is entitled to claim under s 8 (1) (b). It therefore appears to me that only like should be deducted from like. However, in order to obviate repetition, I shall henceforth merely refer to a deduction to be made in terms of the proviso to s 8 (1) (a).’

I understand this to mean what has been explained above: if the workman does not claim for a head of damages suffered, that head, nevertheless, has to be included in the computation. The deduction is made, not from the other damages established, but from the gross damages. This interpretation is consistent with the statement from the judgment quoted earlier and the learned Judge’s preceding discussion relating to the question of whether one may claim damages from a wrongdoer in respect of free medical or hospital treatment received (at 576A-580H).

[18] The judgment in Senator¹⁴ did also not underwrite or apply the principle. This Court found, on an interpretation of the pleadings and the common cause facts (at 367I) that the plaintiff had suffered, over and above the amount of the compensation paid, an amount of R15 950,00 (at 367I-J). This amount the plaintiff claimed. The argument of the third party, namely that the compensation paid by the Commissioner should be deducted from the claimed amount was rightly rejected. The reference (at 368A-D) to the fact that the Act does not provide for compensation for general damages was simply made to underscore the Court’s interpretation of the pleadings and the common cause facts, namely that it had been agreed that the plaintiff’s ‘common-law damages’ – and the third party’s gross liability – amounted to the claimed amount plus the amount of the compensation paid.

[19] It follows from this that I agree with the RAF’s contentions and would uphold the appeal accordingly. It also follows that I do not agree with the approach of the Court below, which was neither that of the plaintiff nor the RAF (at 402A-F) – it granted judgment for R30 000 as explained earlier. This means that the judgment in favour of the plaintiff has to be reduced to R12 820,36 as calculated above. The reader may wonder why the RAF is so concerned to protect the interests of the Commissioner. The answer is that it is not – it is here to protect its own interests because the Commissioner has failed to claim from it under s 36s (1)(b) and that any claim by the Commissioner has probablymay have become prescribed. Because of the interest of the present Director General in the outcome of the case, after oral argument, we invited the Director General to file written representations, which was done and in which the Director General sided with the plaintiff.

[20] The RAF did not ask for an order for costs on appeal against the plaintiff since this is a matter of principle for the RAF. Consequently no such order is called for. The intervention of the Director General, who should probably have been joined, was at the request of the Court and should not have any further costs implications.

[21] Last, it should be pointed out that s 36 has in 1997¹⁵ underwentgone some amendments which may either be substantive or merely cosmetic. IWhereas in the past the amount which the Commissioner would have been liable for had to be deducted from the employee’s claim; now it is the amount actually paid – at least that is what is said. The future obligations, such as future pension payments cannot be deducted. But then ss (4) conveys a contrary intention. The same applies to ss (1)(b) which entitles the Director General to claim, not only for moneys actually paid but for those ‘that he is obliged to pay’. Something appears to have gone wrong.

[220] I concur with the order proposed by Mthiyane JA.

____________________

L T C HARMS

JUDGE OF APPEAL

AGREE:

CONRADIE JA

1 Art 43(a) of the agreement contained in the Multilateral Motor Vehicle Accidents Fund Act 93 of 1989.

2 The amendments introduced by Act 61 of 1997 are indicated in the footnotes that follow.

3 ‘Compensation Commissioner’ was replaced with ‘Director General’.

4 It now reads: ‘In awarding damages in an action referred to in subsection (1) (a) the court shall have regard to the compensation paid in terms of this Act.’

5 Now: ‘Director General’.

6 Maphiri v Road Accident Fund 2002 (6) SA 383 (W).

7 Botha v Miodownik & Co ()Pty) Ltd 1966 (3) SA 82 (W).

8 Sasol Synthetic Fuels (Pty) Ltd and Others v Lambert v Others 2002 (2) SA 21 (SCA) para 10.

9 Sasol Synthetic Fuels (Pty) Ltd and Others v Lambert v Others 2002 (2) SA 21 (SCA) para 10.

9 Klaas v Union South West Africa Ins Co Ltd 1981 (4) SA 562 (A); SenatorVersekeringsmaatskappy Bpk v Bezuidenhout 1987 (2) SA 361 (A). These cases have been explained and distinguished in the judgment of Mthiyane JA.

10 Chapter VI deals with the different types of compensation.

11¹⁰ Chapter VI deals with the different types of compensation.

^ Workmen’s Compensation Commissioner v Norwich Union Fire Insurance Society Ltd 1953 (2) SA 546 (A).

12 Klaas v Union South West Africa Ins Co Ltd 1981 (4) SA 562 (A) 587B-C.

13 Klaas v Union South West Africa Ins Co Ltd 1981 (4) SA 562 (A).

14 Senator Versekeringsmaatskappy Bpk v Bezuidenhout 1987 (2) SA 361 (A).

15 By Act 61 of 1997. The detail appears from fn 4 above.