Lieberman v Santam Ltd

The appellant was injured in a motor vehicle collision on 13 October 1989 and lodged a claim under the Multilateral Motor Vehicle Accidents Fund Act 93 of 1989 through the respondent, Santam Ltd. While another injured passenger (Meyer) instituted action, her claim was settled by agreement in 1994, which was made an order of court. That settlement agreement expressly extended, mutatis mutandis, to the appellant’s claim, fixing Santam’s liability at R25 000 for one driver’s negligence and 50% of such damages as might be agreed or ordered for the other driver’s negligence. Santam paid the R25 000, but the parties could not agree on quantum for the remaining damages. The appellant issued summons in October 1995 claiming 50% of his alleged loss. Santam raised a special plea that the claim had prescribed under the Act. The appellant contended that his cause of action was contractual, based on the settlement agreement, and therefore governed by the Prescription Act 68 of 1969.

The appeal was upheld with costs. The order of the court a quo was set aside and replaced with an order dismissing the special plea of prescription with costs.

The case is important for clarifying that a settlement agreement relating to a statutory motor vehicle accident claim can create a new, independent contractual cause of action. It confirms that, where such a new obligation arises, prescription is governed by the Prescription Act rather than the prescriptive provisions of the Multilateral Motor Vehicle Accidents Fund Act.