Basson v Road Accident Fund (5213/2021) [2025] ZAWCHC 229 (30 May 2025)

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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

 

IN
THE HIGH COURT OF SOUTH AFRICA

(WESTERN
CAPE DIVISION, CAPE TOWN)

 

JUDGMENT

REPORTABLE

Case No:  
5213/2021

 

In the matter between:

 

LISA
BASSON                                                                  

PLAINTIFF

 

and

 

ROAD ACCIDENT
FUND                                                 

DEFENDANT

 

Neutral
citation:      Lisa
Basson v Road Accident Fund (Case
No. 5213/2021) [2025] ZAWCHC … (30 May 2025)

 

Heard:                               

16 May 2025

Delivered
electronically:   30 May 2025

 

SALIE
AJ

 

INTRODUCTION:

 

1]              
The plaintiff instituted an action for
damages against the defendant for damages suffered in a motor vehicle
collision that occurred
on 9 March 2019 at or near Sandbaai,
Hermanus, Western Cape.

 

2]              
The plaintiff suffered a pelvic fracture
(CT scan showed multiple bilateral pelvic fractures involving the
inferior pubic ramus,
the left superior pubic ramus, the right
anterior acetabular wall, extending into the right hip joint,
together with a short fracture
through the right sacral iliac; burns
to the left shoulder and an injury to the left thigh.

 

3]              
At the commencement of proceedings, the
parties informed the court that the only issue for determination is
the liability of the
defendant to pay past and hospital and medical
expenses.

 

 

4]              
At the hearing defendant introduced its
amended plea by consent between the parties.  It reads as
follows:

 

a)             
“The defendant denies liability
for these expenses (medical expenses, past hospital and medical
expenses) and the plaintiff is put
to the proof thereof.

 

b)             
The defendant pleads that in terms of
the Medical Schemes Act 131 of 1998, which provides that a medical
aid scheme is compelled to pay certain expenses incurred by its
members and consequently he is unable
to contract out of such
obligation.

 

c)              
The defendant pleads that the
plaintiff’s medical aid, Discovery Health, cannot contract out
of such an obligation to pay
these expenses; by entering into an
agreement with the plaintiff to claim back the amount it has paid on
behalf of the member.

 

d)             
The defendant pleads that the medical
scheme is compelled to disburse medical treatment to the plaintiff as
a prescribed minimum
benefit and he is entitled to under the Medical
Schemes Act, hence no loss is suffered by the plaintiff as the third
party in the action.

 

e)             
The defendant pleads that these
expenses claimed by the plaintiff constitutes emergency medical care
which falls within a basket
of care listed in Regulation 8 of the
Medical Schemes Act, which basket of care is further defined as
prescribed minimum benefits, which Discovery Health has undertaken to
pay on behalf of the
members.

 

f)               
The defendant specifically pleads
that Discovery is prohibited from contracting out of its statutory
obligations under Medical Schemes Act, No. 131 of 1998,
(The Medical Schemes Act )  in
terms of Section 29(o) and (p) of the same Act, which is tantamount
to an exclusion of the defendant’s liability in terms of
Section 19(d)(1) of
the RAF Act.” 

 

5]              
The key question premised on the amended
plea and later amplified in the stated case which must be answered,
in casu,
is whether a case has been made by the defendant based on policy
consideration of fairness, equity and reasonableness to disavow

plaintiff’s claim for her past hospital and medical expenses.

 

STATED CASE:

 

6]              
The parties presented a stated case in
terms of Rule 33(1) of the Uniform Rules.  In essence, the
stated case which I deem
necessary to reproduce, states the
following:

 

1.           
“On or about 9 March 2019, the plaintiff
sustained certain injuries in a motor vehicle accident.

2.           
As a result of the injuries and the sequelae thereof,
the plaintiff incurred hospital- and medical expenses in the sum of
R265 609.97.

3.           
The parties agree that an amount of R60 756.63 is due
and owing to the Plaintiff. Thus, the amount of past medical and
hospital
expenses in dispute is R204 853.34

4.           
The parties agree that for purposes of argument, the
past medical and hospital expenses in dispute and paid by Discovery
Medical
Scheme, constitutes Prescribed Minimum Benefits (PMB) and
Emergency Medical Care (EMC), in accordance with the Medical Schemes
Act, no. 131 of 1998 [“the Act”].

5.           
At all material times:

5.1.         
the plaintiff was a member of a medical aid scheme, to
wit, Discovery;

5.2.         
the hospital- and medical expenses were paid by
Discovery;

5.3.         
the plaintiff has contracted with Discovery to
reimburse the scheme for any amount paid by the defendant for past
hospital- and
medical expenses.

6.           
The defendant disputes its liability to compensate the
plaintiff for the past hospital- and medical expenses (Other than the
agreed
amount of R60 756.63) on the following grounds:

6.1.         
The Act provides that a medical aid
scheme is compelled to pay certain expenses incurred by its members
and is consequently unable to contract
out of such obligation;

6.2.         
Plaintiff’s medical aid cannot contract out of
the obligation to pay these expenses by entering into an agreement
with its
member to claim back the
amount paid on behalf of the member;

6.3.         
the medical aid scheme is compelled to disburse medical
treatment to Plaintiff as prescribed minimum benefits that she is
entitled
to under the Act and hence Plaintiff has suffered no loss as
the third party in this action;

6.4.         
the expenses claimed constitute emergency medical care,
which falls within the ambit of care listed in Regulation 8 of the
Act,
which care is further defines as prescribed minimum benefits
which the medical aid scheme has undertaken to pay on behalf of its

members;

6.5.         
the medical aid scheme is prohibited from contracting
out its statutory obligations under the Act in terms of Section 29(o)
and
(p), which is tantamount to an exclusion of Defendant’s
liability in terms of Section 19(d)(i) of Act 56 of 1996.

7.              
In essence, the defendant pleads in relation to Section
19(d)(i) that, because the plaintiff as a member of the medical aid
scheme
(as opposed to an insurer) has agreed to
reimburse such scheme any amounts paid over by the scheme to service
providers, such amount or an agreement falls
within the exclusionary
provisions of the sub-section and outside the scope of the principle
of subrogation.”  (emphasis
added)

 

PLAINTIFF’S
CONTENTIONS:

 

7]              
The plaintiff contends, by virtue of the
provisions of Section 17 of the Road Accident Fund Act, 56 of 1996
(“the RAF Act”),
as amended, and read together with the
proviso
that the plaintiff contracted with Discovery to reimburse the scheme
with any amount paid by the defendant in relation to past
hospital
and medical expenses.

 

8]              
The
plaintiff also relied on the minority judgment of Discovery
Health (Pty) Ltd v Road Accident Fund and Another 2023 (2) SA 212
(GP) (“discovery health 2”),[1]
in that the defendant is, in law, liable to compensate the plaintiff
in respect of past medical and hospital expenses which the
medical
aid paid on behalf of the plaintiff.  In this regard, the
plaintiff had relied on a number of judgments in this Division,[2]
enforcing her claim.

 

DEFENDANT’S
CONTENTIONS:

 

9]              
In short, defendant relies on the majority
judgment in Discovery Health (Pty) Ltd v
Road Accident Fund and Another, Case No.: 2022/016179, 27 October
2022 (“discovery health 1), and
the statutory obligation on the Medical Aid Schemes Act, namely
Section 29(o) and (p), together with the alleged exclusion
of
defendant’s liability in terms of Section 29(d)(a) of the RAF
Act, where the following is stated at [20] to [21]:

 

“[21]
In terms of our law, benefits received by a claimant from the
benevolence of a third party or a private insurance policy are
not
considered for purposes of determining the quantum of a claimant’s
damages against the first respondent. The reason for this
is merely
because a benefit that accrues or is received from a private
insurance policy origin from a contract between the insured
and the
insurance company for the explicit benefit of the claimant and its
receipt does not exonerate the first respondent from
the liability to
discharge its obligation in terms of the RAF Act. In Zysset and
Others v Santam Ltd 1996 (1) SA 273 (C) at 277H – 279C the set out
the principle in the following words: “The modern South African
delictual action for damages
arising from bodily injury negligently
caused is compensatory and not penal. As far as the plaintiff’s
patrimonial loss is concerned,
the liability of the defendant is no
more than to make good the difference between the value of the
plaintiff’s estate after the
commission of the delict and the value
it would have had if the delict had not been committed … Similarly,
and notwithstanding
the problem of placing a monetary value on a
non-patrimonial loss, the object in awarding general damages for pain
and suffering
and Joss of amenities of life is to compensate the
plaintiff for his loss. It is not uncommon, however, for a plaintiff
by reason
of his injuries to receive from a third party some monetary
or compensatory benefit to which he would not otherwise have been
entitled.
Logically and because of the compensatory nature of the
action, any advantage or benefit by which the plaintiff’s loss is
reduced
should result in a corresponding reduction in the damages
awarded to him. Failure to deduct such a benefit would result in the
plaintiff recovering double compensation which, of course, is
inconsistent with the fundamental nature of the action.

 

Notwithstanding the
aforegoing, it is well established in our law that certain benefits
which a plaintiff may receive are to be
left out of the account as
being completely collateral. The classic examples are (a) benefits
received by the plaintiff under ordinary
contract of insurance for
which he has paid the premiums and (b) money and other benefits
received by a plaintiff from the benevolence
of third parties
motivated by sympathy. It is said that the law baulks at allowing the
wrongdoer to benefit from the plaintiff’s
own prudence in insuring
himself or from a third party’s benevolence or compassion in coming
to the assistance of the plaintiff.”

 

[22)
In Ntlhabyane v Black Panther Trucking (Pty) Limited and Another2010
JDR 1011 (GSJ) the court expressed the principle in the
following
terms: “a plaintiff’s insurance, her indemnification in terms of
it, and the consequent subrogation of her insurer
are all matters of
no concern to the third party defendant.”

 

10]           
Defendant contends further that the
expenses claimed constitute emergency medical care, which falls
within the ambit of care listed
in Regulation 8 of the Medical
Schemes Act, 131 of 1998 (“the Act”) and ought not to be
deducted from the common law
claim, and relies on the following
passage:

 

“[92]      
The challenge facing Discovery Health and the medical schemes it
represents goes beyond
questions of interpretation of its rules. 
The rules published by the Discovery Medical scheme are only for its
members and
the scheme and not third parties like the RAF.  The
rule dealing with recovering from the RAF what the scheme has paid in
discharge of its contractual and statutory obligations is a rule of
Discovery Medical Scheme’s own making.  It cannot bind
third
parties, including the RAF.  The Government Employees Medical
Scheme (GEMS), the third largest scheme in the country,
does not
oblige members in its rules to claim any past medical expenses from
the Fund.  Conceivably, GEMS accepts that it
cannot recover what
it is statutorily required to pay by way of PMB’s and EMC’s
from the RAF.”

 

11]           
In addition to the above, defendant
contends that the medical aid scheme is prohibited from contracting
out of its statutory obligation
under the Act, in terms of Section
29(o) and (p), which is tantamount to an exclusion of defendant’s
liability in terms of
Section 19(d)(i) of the RAF Act.

 

DISCUSSION:

 

12]           
It
is trite that a claim for patrimonial loss for bodily injury is
compensatory in nature and does not embody a punitive element.[3]

 

13]           
In principle, a plaintiff is not entitled
to receive double compensation, and the wrongdoer ought not to be
relieved of liability
by reason of some fortuitous event. 
Accordingly, plaintiff is entitled to compensation to the extent of
the reduction of
his patrimony caused by the wrongful and negligent
act of the wrongdoer. 

 

14]           
The
approach to the deductibility of benefits has been restated on
several occasions and can now be settled, in that benefits resulting

from damage caused event are generally deducted, however, there is no
clear prudential basis for deciding what benefits are collateral;
the
enquiry mainly involves considerations of public policy and
equity.[4]

 

15]           
It
is common cause that Discovery paid the past hospital and medical
expenses by virtue of a contractual arrangement between itself
and
the plaintiff.  By doing so, Discovery discharged its
contractual obligation towards the plaintiff in terms of law and
the
private contract entered into between the parties.  Such a
contract is only binding between the parties to the contract,
and not
third parties, such as the defendant in this matter.[5]

 

16]           
It
bears emphasis that, pursuant to Section 29(2) of the Medical Aid
Schemes Act, the medical aid shall, in the event of a failure
to
repay any debt due to the medical aid scheme, be entitled to cancel
the contract of its member.[6] 
The defendant has accepted that plaintiff, upon a successful
prosecution of her claim, had contracted with Discovery to reimburse

the scheme for any amount paid by the defendant in relation to the
past medical expenses.[7]

 

17]           
The
majority in Discovery
Health 2,[8]
concludes that Discovery Health has never claimed to be an insurer,
much less an indemnity insurer, nor is it its case that it
represents
insurers.  It bears emphasis, that inasmuch as Discovery Health
has not claimed to be an insurer, much less, an
indemnity insurer[9]
this matters not -as in my view it remains an incorporated medical
aid society governed by its own rules and regulation, ie., that
only
a member, duly registered, would be entitled or disentitled to its
benefits as per the terms of the contract concluded.

 

18]           
I
respectfully agree with the Minority Judgment in Discovery
Health 2,[10]
wherein Opperman J states:

 

“… Whether
the payment by the medical aid scheme was made pursuant to its
contractual or its statutory obligations does not seem to
me to be
relevant to what the RAF’s statutory obligations are, which is
to pay claims.  To carve out from the term “expenses”

the portions labelled prescribed minimum benefit costs and emergency
medical condition costs and to contend that such lesser, ‘carved

out’ costs are excluded because they derive from another
statute not a private contract, in my view, cannot hold.”

 

19]           
Further,
Opperman J concludes that the Medical Aid Schemes Rules are given
statutory force and are binding upon a scheme and its
members by
virtue of Section 32 of the Medical Aid Schemes Act:[11]

 

“[115]   
Medical aid schemes’ rules are given statutory force and are
binding upon the scheme and its members
by virtue of section 32 of
the MSA.  Discovery Health contends, and it was not disputed on
the papers before us, that it is
a standard requirement of medical
aid schemes’ rules for their members to reimburse the medical
scheme for payments in respect
of past medical expenses recovered
from the RAF, which obligation does not arise until such time that
there is a successful recovery
of the past medical expenses by the
claimant from the RAF.  The statutory obligation on the medical
aids to pay PMB’s
and EMC’s does not detract from the
RAF’s obligation to do what its statute obliges it to do as the
Mbongwe J decision[12]
affirmed.  The provisions of the MSA and the RAF Act should be
interpreted together and harmoniously in order to avoid conflicts. 

To interpret the MSA in the manner suggested in the first judgment
would lead to the result that the one Act, the MSA, authorises

reimbursement and the other, the RAF Act, prohibits it.”

 

20]           
In
Lechner,[13]
the SCA was called upon to characterize the benefit that the claimant
received from a foreign insurance company which, in essence,
was
constituted in terms of the German Social legislation and in terms
whereof plaintiff in that matter was required to repay what
she had
claimed from the RAF in the event of her being successful in a
delictual claim.  The SCA concluded as follows:

 

“[19] I
accept that the premiums paid by Ms Lechner bore no direct
relationship to the risk insured. In this sense the scheme to
which
she belonged differed from the usual private medical schemes. But it
is beyond dispute that she enjoyed benefits as a voluntary
member at
the time of her accident. The fact that she later at times became a
compulsory member after her accident, which was forced
upon her
because of the injuries she sustained in the accident, cannot in my
view change the situation. Crucially, as I have mentioned,
she
received her benefits in return for her contributions. Had she ceased
paying contributions, her benefits would also have ceased,
or later
been suspended. In my view this is sufficient to render the benefits
received from the KKH res inter alios acta as
far as the
Fund is concerned.

 

[20] Moreover, as
Mr Potgieter accepted on behalf of the Fund, there is no question of
Ms Lechner receiving double compensation
by virtue of the German
legislation referred to earlier. Instead he submitted that the
ultimate question in this matter is whether
the Ms Lechner’s
expenses are to be paid for by the South African or German taxpayer.
He further submitted that it would
be contrary to public policy for
this country’s taxpayers to reimburse the KKH for expenses
incurred in the execution of
its statutory mandate.”

 

21]           
Defendant’s argument that the plaintiff’s medical
aid
scheme was compelled to settle plaintiff’s medical bills as
prescribed minimum benefits, and having done so, plaintiff
had not
suffered any loss as a third party, falls to be rejected for the
following reasons:

 

a)             
firstly,
Discovery
Health 1[14]
conclusively dealt with the three directives which deprived
plaintiffs from claiming past medical expenses. These arguments had

been dealt by Mbongwe J who concluded that plaintiffs were entitled
to their past medical expenses.  That matter had become
res
judicata
insofar as defendant is concerned, as the SCA as well as the
Constitutional Court refused the RAF leave to appeal:

 

b)             
secondly, in casu, the RAF advanced the argument that
it did not rely on any directive dealt with in Discovery Health 
1; hence I am bound by the terms of the contractual relationship
entered into  between the parties as ensconced in the stated

case.

 

c)              
thirdly, plaintiff is entitled to damages
against the defendant and
placed in the same financial position had the collision not occurred.
In my view RAF Act must trump the
Medical Schemes Act which in
essence caters for the consolidation, registration of medical aid
schemes and the protection of the interests of its members.
In
essence it is a regulatory body exercising oversight over medical
schemes.

 

The
RAF’s ARGUMENT IN TERMS OF SECTION 19 OF THE RAF ACT:[15]

 

This
argument had been dealt with authoritatively in Fookwe v Road
Accident Fund (23481/2016) [2024] ZAWCHC 115 (29 April 2024), at
[10] – [11]: in which the court stated the following;

 

“[10]    The
RAF’s argument in relation to s 19(d)(i) is that because
the plaintiffs, as members of
their medical aid schemes, agreed to
reimburse such scheme any amounts paid over by the scheme to service
providers, this amounts
to an agreement falling within the
exclusionary provision of that subsection. In Road Accident Fund
v Abdool-Carrim and Others at
issue was the proper
interpretation of s 17(5) read with s 19(d) of the RAF Act…

 

[12]    Support
for the above interpretation is to be found in the main purpose of
the Act referred to earlier
and also to the accessory nature of the
supplier’s claim. In my view, the Fund’s interpretation
of the effect of s 17(5)
is incorrect. It is not necessary to
substitute ‘supplier’ for ‘third party’ in
s 19(d) to give efficacy
to the subsection. On the contrary the
substitution places it at odds with the Act’s purpose, and from
the Fund’s perspective,
achieves nothing. For if a third
party’s claim is valid and enforceable and the supplier’s
is not, the Fund would still
be liable to compensate the third party
who in turn remains contractually liable to the supplier. The
consequence is that a third
party may be faced with a claim with a
supplier without having been paid and would be denied the benefit of
s 17(5) without
any fault on his or her part. This result could
hardly have been what the draftsman intended. Moreover it is
illogical for the
third party claim to be valid and enforceable but
the supplier’s accessory claim not (except where the supplier
has not complied
with the prescribed formalities).

 

[13]    It
is understandable that the legislature would seek to protect third
parties, many of whom are indigent,
from entering into champertous
agreements, which is probably what s 19(d) intends
to achieve. But there is no apparent reason to restrict the
contractual freedom of suppliers,
many of whom are professional
people, institutions or companies from contracting with whoever they
choose to process their claims.
They should be capable of looking
after themselves.’” (my emphasis) (footnotes
excluded)

 

22]           
I conclude that the defendant’s
Section 19(d) defence falls to be rejected, more particularly in
light of the Abdool-Carrim judgment supra. 
I am of the view that the provisions of Section 19(c) and (d) of the
Raf Act  are to be read conjunctively which, in
essence,
prevents a person other than  an attorney from profiting in any
manner from the handling of third party claims against
the Raf. I am
fortified in my view in that on an objective reading of the
provisions of Section 19(c) and (d) of the Raf Act, the
contract
entered into between the plaintiff and Discovery Health is
contractually and legally valid and enforceable.

 

23]           
Plaintiff accordingly succeeds in her claim for her past
medical expenses. and in turn Discovery health would be entitled to
reclaim
the past medical expenses from the plaintiff paid in 
terms of the policy governing their contractual relationship.

 

COSTS:

 

24]           
In light of the misconceived arguments of
the defendant, plaintiff is entitled to her costs on the attorney and
client scale and

 

25]           
I make the following Order:

 

(a)           
Defendant shall pay to the Plaintiff the
capital sum of R265 609.97 (Two
Hundred and Sixty-Five Thousand Six Hundred and Nine Rand
Ninety-Seven Cents) by way of an
electronic transfer into her attorneys’ trust account, the
details of which are set out hereinunder, payment
to be effected
within 180 (one hundred and eighty) days from date of this order;

 

(b)           
Defendant shall pay Plaintiff’s taxed
or agreed costs on the High Court Scale, as between attorney and
client, including any
taxed or agreed costs incurred in the obtaining
of payment of the capital sum and/or costs and counsel’s fees
for the hearing
on 6 & 16 May 2025 on scale B;

 

(c)            
payment of the taxed or agreed costs shall
be effected within 180 (one hundred and eighty) days from date of
agreement or taxation;

 

(d)           
Defendant shall be liable for interest on
the taxed or agreed costs from 14 (fourteen) days from date of
agreement of allocator
until date of final payment at the relevant prescribed rate of
interest applicable.

 

(e)           
Plaintiff’s attorney’s trust
banking details are as follows:

 

BANK:                      

First National Bank

ACCOUNT:  
Kruger & Co. Inc.

BRANCH:                
Parow

BRANCH CODE:    
200 510

                            

ACCOUNT
NO:        5[…]

 

 

 MOHAMED
SALIE

ACTING
JUDGE OF THE HIGH COURT

 

 

Appearances:

 

For plaintiff:  
Advocate Henry McLachlan

Instructed by:           
Kruger & Company

 

For defendant:         
Brett-Elliot Lategan

Instructed by:           
Office of the State Attorney, Cape Town

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