Road Accident Fund v Maphiri (2) (391/2002) [2003] ZASCA 114 (30 September 2003)

Summary: Interpretation and application of s 36 of the Compensation for Occupational Injuries and Diseases Act 130 of 1993.

JUDGMENT

[23] This appeal concerns the interpretation and application of s 36 of the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (‘the Compensation Act’), in particular the question of how compensation paid in terms of the Act is to be dealt with where there is an apportionment. The appeal is from a judgment of Gautschi AJ reported as Maphiri v Road Accident Fund 2002 (6) SA 383 (W).

[24] The respondent (the plaintiff) sued the appellant (the defendant) for damages arising out of injuries sustained in a motor vehicle collision which occurred on 6 September 1996. The parties agreed that an apportionment of 50% would apply. The matter came before the court a quo by way of a stated case in terms of Rule 33 of the Uniform Rules of Court. The stated case read as follows:

‘1. The following amounts were paid by the Compensation Commissioner in terms of the Compensation Act:

1.1 Compensation in respect of the plaintiff’s total disablement from 6 September 1996 to 24 November 1996 4 473,87

2. The plaintiff’s claim set out in its particulars of claim consists of the following:

3. The parties have agreed that for purposes of the stated case, the plaintiff’s common law damages are assessed in the following amounts:

3.4 An undertaking as envisaged in art 43(a) of Act 93 of 1989 of the costs of the future accommodation of the plaintiff in a hospital or nursing home and such treatment, services or goods as the plaintiff may require as a result of the accident, limited to 50% of such costs.

4. The parties agreed that the quantum of the plaintiff’s claim be settled as set out in para 3 above.

5. The parties agreed that the only issue in dispute shall be the method of calculating the award to be made to the plaintiff, having regard to:

6. The parties agreed that the Court in awarding damages shall have regard to the Compensation Commissioner’s award set out in para 1 supra.

7. The plaintiff has not been compensated for general damages by the Compensation Commissioner.

8.1 the above Honourable Court should only have regard to the amounts paid by the Compensation Commissioner in relation to specific heads of damage to which these amounts relate and which should therefore not be deducted from heads of damage to which they do not relate;

8.2 the above Honourable Court shall only have regard to the amount likely to become payable to the Compensation Commissioner in terms of the provisions of s 36 of the Act which amount the plaintiff contends is 50% of R38 346,17, ie R19 173,09;

8.3 on the aforestated basis, the defendant is liable in the sum of R31 993,26 and an undertaking limited to 50%.

9.1 the whole amount of the plaintiff’s claim should firstly be reduced by 50%;

9.2 thereafter, and secondly, the total of the Compensation Commissioner’s award should be deducted from the apportioned remainder;

9.3 on the aforesaid basis, the defendant is liable in the sum of R12 820,17 and an undertaking limited to 50%.’

[25] The court a quo gave judgment for the plaintiff and ordered the defendant to pay damages in the sum of R30 000 and costs of suit, and to furnish the plaintiff with an undertaking^¹ in respect of future medical expenses limited to 50%. Relying on the so called ‘like from like’ principle (about which more later) referred to in Klaas v Union and South West Africa Insurance Co Ltd^² and Senator Versekeringsmaatskappy Bpk v Bezuidenhout^³ the judge a quo held that the compensation paid by the Commissioner in respect of one head of damage had to be deducted from the equivalent head of damage in the plaintiff’s claim against the defendant. The appeal is before this Court with leave of the court a quo.

[26] The right to recover compensation and damages is governed by s 36 of the Compensation Act. At the time, it read:

(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 –

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

(3) In an action referred to in sub-section (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 Commissioner of the pension, irrespective of whether a lump sum is, at any time paid in lieu of the whole or portion of such pension in terms of section 52 or 60; and periodical payments or allowances, as the case may be.’

[27] The position was previously governed by s 8 of the Workmen’s Compensation Act 30 of 1941^⁵ (the Workmen’s Compensation Act). It read:

‘Recovery from third party by workman of damages and by Commissioner or employer of compensation paid.

[28] Sections 36 and 8 referred to above are more or less to the same effect. So are the objects of the two Acts which are:

(a) To provide compensation from the Commissioner for the injured employee (workman) irrespective of fault;

(b) To allow the employee (workman) both to claim that compensation and to claim damages from a third party;

(c) To oblige a court considering an employee’s (a workman’s) claim for damages against a third party to ‘have regard to’ (deduct) the compensation which the Commissioner may have paid or will be liable to pay the employee (workman).

(d) Where the Commissioner has already paid and seeks to recover what he has paid or will be liable to pay (whether by intervention in the workman’s or employee’s case against the third party or by separate action) the Commissioner cannot get more than what the employee is entitled to recover from the third party.

In my view the construction which the courts have previously placed on the meaning and effect of s 8 of the Workmen’s Compensation Act remains valid and instructive in interpreting and applying the provisions of s 36 of the Compensation Act.

[29] Section 36 (2)^⁶ provides that when a court considers the damages to be awarded to a plaintiff (employee) it is obliged to ‘have regard to’ the compensation paid in terms of the Act. In Bonheim v South British Insurance Co Ltd^⁷ Ogilvie Thompson JA assumed (without deciding) that the words ‘shall have regard to’ in s 8 of the Workmen’s Compensation Act meant ‘deduct’. That approach has ever since been followed in this Court^⁸ and in many decisions of the provincial and local divisions. The main issue in this case is whether the compensation paid by the Commissioner (R38 346,17) should be deducted from the plaintiff’s total damages (R51 166,33) or only from the equivalent heads of damage. In Bonheim it was held that such compensation had to be deducted from the plaintiff’s total claim or ‘aggregate damages’.^⁹ Two principles were laid down in Bonheim. The first was that ‘the legislature did not intend to increase the third party’s liability beyond the aggregate amount of his common law liability to the workman’ and the second was that ‘the injured workman should [not] obtain recompense for his injuries in any sum, which when added to the compensation receivable by him under the [Workmen’s Compensation] Act, would exceed the aggregate of his common law damages’. In Maasberg v Springs Mines Ltd^¹⁰ it was said that the legislature did not intend that the workman ‘should be paid twice over for the same injury’.

[30] In Wille and Another v Yorkshire Insurance Co Ltd^¹¹ and Botha v Miodownik and Co (Pty) Ltd^¹² it was held that the amount paid under the Workman’s Compensation Act had to be deducted from the total amount found to be payable to the workman^¹³ as common law damages after apportionment. In Nqcobo^¹⁴ supra Stafford J came to the same conclusion. This approach is fiercely contested by the plaintiff. The plaintiff argues that the compensation (R38 346,17) should be deducted from the special damages and not from the total agreed claim (R51 166,53). For this, as previously stated, reliance was placed on the obiter dictum in Klaas where Van Heerden AJA remarked that ‘only like should be deducted from like’^¹⁵ and on Bezuidenhout where reference was made to the Klaas case. In Klaas the court was concerned with the interpretation of the word ‘compensation’ in s 8 of the Workmen’s Compensation Act and the ‘like from like’ principle was never applied. In Bezuidenhout the workman had been awarded R21 375,69 as compensation by the Commissioner. The only issue was whether this amount should be deducted from the injured workman’s determined future medical costs and agreed general damages, which totalled R15 950. The court rejected the defendant’s argument that such deduction should be made. On the facts it appeared that the plaintiff had incurred further medical expenses which were claimed from the third party and for which compensation had not been paid. Those medical expenses formed a component of the claim for R15 950. On a proper reading of the judgment the main reason for rejecting the defendant’s argument was not that the facts favoured the matching of heads of damages. It seems to me that one of the reasons for the decision is to be found in the following passage in the judgment:

‘Al wat blykens die notule in geskil was, is of die totale toekenning van R21 375,69 deur die Kommissaris afgetrek moes word van die bedrae genoem in (6) wat dan sou meebring dat verweerder hoegenaamd nie vir betaling van skadevergoeding aanspreeklik sou wees nie’.^¹⁶ [Emphasis added]

[31] The ‘like from like’ principle must be understood in the context of the facts of the case that Van Heerden JA was dealing with. All he was saying, it seems to me, was that one cannot deduct from the plaintiff’s claim the amount which the Commissioner has paid for medical treatment where the plaintiff has made no claim for damages for the cost of such treatment. It would be otherwise if the plaintiff had also claimed damages for the costs of such medical treatment. The court would then have deducted from the total amount of damages to be awarded, the amount which the Commissioner had paid. If the Commissioner’s claim was in fact larger (and provided it was correctly quantified in terms of the Act) then the whole amount of the claim would fall to be deducted, even if that meant that the award for general damages would be reduced pro tanto. The case was one to which the Commissioner was not a party and the defendant sought to exploit the Commissioner’s liability in respect of medical treatment in order to reduce its own liability for general damages. There was no investigation of that issue and therefore no basis for reducing the award to be made to the plaintiff for general damages.

[32] I do not see why a deduction of the compensation from the plaintiff’s total claim in terms of Bonheim should give rise to problems. Take as an example a case where the plaintiff is awarded R30 000 by the Commissioner (made up of R15 000 for past medical and hospital expenses and R15 000 for temporary total disability). The plaintiff sues the defendant for R80 000 (R30 000 for special damages and R50 000 for general damages). Where there is no apportionment the court would deduct R30 000 and the plaintiff would receive R50 000. The plaintiff gets nothing more and nothing less than the full common law damages to which the plaintiff is entitled, if account is taken of the fact that R30 000 had already been paid as compensation by the Commissioner. The defendant does not pay anything more than its full common law liability. The Commissioner recovers what he is entitled to in terms of the Act.

[33] Turning now to where there is a 50% apportionment, the court would deduct R30 000 from the apportioned sum of R40 000 and the plaintiff would receive R10 000. The plaintiff is not getting anything less than the full common law damages, if regard is had to the fact that payment of R30 000 as compensation has already been made by the Commissioner. The defendant does not get off scot-free because it is liable for the full amount of R40 000, even though R30 000 goes to the Commissioner and R10 000 to the plaintiff.

[34] As to the facts of this case the position is exactly the same. The Commissioner paid R38 346,17 as compensation (R33 872,32 for past medical and hospital expenses and R4 473,87 for temporary total disability). The plaintiff’s apportioned claim is R30 000 for general damages, R18 183,75 for past medical and hospital expenses and R2 982,58 for loss of income. In total the plaintiff’s claim was (after apportionment) agreed at R51 166,53. If the compensation (R38 346,17) is deducted from it the plaintiff would receive R12 820,36. The Commissioner would recover full compensation paid in terms of the Act and the defendant would not pay more than what it is liable to pay at common law (R51 166,53). Although the plaintiff gets R12 820,36 nothing less than his common law damages has been awarded if account is taken of the amount paid by the Commissioner (R38 346,17).

[35] On the other hand if the ‘like from like’ principle as understood and construed by the plaintiff is applied the following would occur. The compensation (R38 346,17) will have to be deducted only from the special damages (made up of R18 183,75 and R2 982,58) and not from the plaintiff’s total damages (R51 166,3) as this would reduce the general damages (R30 000). So, on this basis then, the plaintiff would receive the R30 000 for general damages plus the excess of special damages over the amount already paid as compensation. The Commissioner would not get back what was paid by way of compensation as provided for in terms of s 36 (2) of the Compensation Act. The judge a quo says it does not matter, as the Commissioner would in any event have got nothing if the employee had been 100% at fault.

[36] I have not been able to find anything in s 36 (or the old s 8) justifying this approach. If there is anything to be said for the point, there is still no convincing explanation in the judgment as to why the plaintiff should be allowed to recover more than his [or her] aggregate damages. The judge a quo attempts to get past this hurdle by saying that the expression ‘full common law damages’ refers to the assessed damages (R102 332,67) rather than the apportioned damages (R51 166,33). This is a construction which in my view is not justified by the plain wording of s 36(2). It seems to me that at the point at which a court considers the amount to be deducted, it is then concerned with the amount ‘recoverable’ by the plaintiff rather than the full damages claim. It therefore follows that the relevant amount from which a deduction had to be made was R51 166,33 and not R102 332,67.

[37] In my view the whole amount of the compensation (R38 346,17) is to be deducted from the plaintiff’s total award irrespective of the fact that it exceeded what the plaintiff has been held to be entitled to in respect of the heads of damage to which the compensation related (if it can be related!). It is true that the plaintiff’s general damages are being reduced by the amount of the excess. But does the Compensation Act prevent the court from deducting the excess merely because it exceeds the amount to which the plaintiff would be entitled under the particular head of damage to which the Commissioner’s payment relates? That would only be so, if one interprets the ‘like from like’ dictum in the Klaas case as requiring a qualitative correlation between the particular amounts being considered. There is nothing in the Act or in the Klaas judgment itself to suggest that the Act was to be interpreted in that way. The judge a quo in a detailed judgment has not pointed to such correlation. As a matter of law the contrary is true. The form in which compensation is awarded does not mirror the heads of damage to be found at common law. It has been said that compensation paid under the Act is not the same as damages.^¹⁷ Nor is there room to compare ‘compensation’ received under the Compensation Act to a benefit under a policy of insurance. An attempt to do so was rejected by Schreiner J in the Maasberg case supra, where the learned judge said ‘compensation received by the workman should [not] be approximated to, and treated on the same basis as, insurance monies, sick-fund benefits and the like’.^¹⁸

[38] It does not matter under which head of damage the Commissioner has paid or will be liable to pay compensation nor that the amount exceeds the amount to which the plaintiff has been found entitled under that head by the court. It is sufficient that it is an amount which the Commissioner was obliged to pay and that the notional total sum of damages to which the plaintiff would be entitled is equivalent to or exceeds that sum. In short, if it means that the award for general damages is reduced or wiped out, that simply is the consequence of the application of the Compensation Act or as Viljoen J put it in the Botha case supra ‘ the impact of the provisions of an Act of Parliament upon the common law’.^¹⁹

[40] Marais JA, who was a member of the Court which heard the appeal, was as a result of indisposition unable to participate in the finalisation of this judgment and the matter was accordingly proceeded with in terms of s 12 (3) of the Supreme Court Act 59 of 1959.

[41] Accordingly the order of the court a quo is set aside and the following is substituted:

‘1. The defendant is ordered to pay to the plaintiff the sum of R12 820,36 and

2. The defendant is ordered to furnish the plaintiff with an undertaking in terms of article 43 (a) of Act 93 of 1989 in the terms set out in para 3.4 of the stated case.’

1 in terms of Article 43 (a) of Act 93 of 1989.

2 1981 (4) SA 562 (A).

3 1987 (2) SA 361 (A) at 366I-J.

4 Now ‘Director General’

5 The Workmen’s Compensation Act 30 of 1941 was repealed and replaced by the Compensation for Occupational Injuries and Diseases Act 130 of 1993 with effect from 1 March 1994.

6 as did s 8(1)(a) of the Workmen’s Compensation Act.

7 1962 (3) SA 259 (A).

8 Klaas and Bezidenhout, supra and more recently, Sasol Synthetic Fuels (Pty) Ltd and Others v Lambert v Others 2002 (2) SA 21 (SCA).

9 Bonheim at 269; Botha v Miodownik and Co (Pty) Ltd 1996 (3) SA 82 (W);

Ngcobo v Santam Insurance Co Ltd 1994 (2) SA 478 (T).

10 1944 TPD 1 at pp 6 et sec; Bonheim at 267 H.

11 1962 (1) SA 183 (D) at 187D.

12 1966 (3) SA 82 (W) at 89D.

13 Now ‘employee’ under the Compensation Act

14 at 485D and 486C.

15 at 580i.

16 Bezuidenhout at 366C.

17 See SAR and H v SA Stevedores Services 1983 (1) SA 1066 (A) at 1088F-H.

18 See Bonheim at 267H-268A.

19 at 90A

South Africa: Supreme Court of Appeal

Road Accident Fund v Maphiri (2) (391/2002) [2003] ZASCA 114 (30 September 2003)

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

ROAD ACCIDENT FUND APPELLANT

JUDGMENT