Elias Tsotetsi v Mutual and Federal Insurance Company Ltd

On 25 February 1991, the applicant Mr Elias Tsotetsi was allegedly rendered a quadriplegic as a result of injuries sustained in a motor vehicle accident. The accident occurred allegedly due to the negligence of the driver of the vehicle in which he was a passenger, which was being driven in the course of business of the owner of the vehicle. On 5 April 1994, the applicant launched an action for damages of R1,143,600 in the Transvaal Provincial Division against Mutual and Federal Insurance Company Ltd, an appointed agent in terms of the Multilateral Motor Vehicle Accidents Fund Act, 93 of 1989. The respondent relied on article 46(a)(ii) of the schedule to the Act which limited damages for a passenger in a vehicle being conveyed in the course of business to a maximum payment of R25,000. The respondent also relied on article 47(a) which provided that where a third party injured was a worker entitled to workmen's compensation, the worker's entitlement to damages was limited to the difference between R25,000 and the amount paid by the Workmen's Compensation Commissioner. The applicant challenged the constitutional validity of these provisions and sought a referral to the Constitutional Court. On 13 February 1995, Curlewis DJP referred the question of validity to the Constitutional Court.

• Whether the referral in terms of section 102(1) of the Constitution was competent, specifically whether the issue referred could be decisive for the case
• Whether the Constitution could be applied retroactively to expand the respondent's liability for damages which accrued before the Constitution came into force on 27 April 1994
• Whether this case constituted exceptional circumstances warranting an exception to the general rule of non-retroactive application of the Constitution
• Whether direct access to the Constitutional Court should be granted in the circumstances of this case

The matter was remitted to the Transvaal Provincial Division. No costs order was made as neither party sought one.

The binding legal principles established are: (1) A referral under section 102(1) of the Constitution is only competent if the issue may be decisive for the case before the referring court, meaning it may have a crucial bearing on the eventual outcome of the case or on any significant aspect of how its remaining parts ought to be handled. (2) The Constitution does not apply retroactively to expand delictual liability that vested before the Constitution came into force on 27 April 1994. The commission of a delict and the liability to pay damages cannot be separated - the right to damages accrues at the moment the delict is committed. (3) Even if there may be exceptional circumstances where enforcement of previously acquired rights would be so unjust that it could not be countenanced, a case would only qualify if: (a) the challenged provision or conduct was a gross violation of the Bill of Rights, and (b) there were special and peculiar reasons requiring a retroactive order. Severe financial implications for state welfare programmes weigh against making retrospective orders. (4) Direct access to the Constitutional Court will only be granted in exceptional circumstances, and such circumstances do not exist where there is no possibility the applicant will be assisted by any order the court may make.

The court made several non-binding observations. First, O'Regan J noted that it was unnecessary to decide definitively the question left open in Du Plessis v De Klerk regarding whether there may be cases where enforcement of rights vested prior to 27 April 1994 would be so unjust that it could not be countenanced, though the court outlined what would be required for such exceptional circumstances. Second, the court observed that even if the accident had occurred after the Constitution came into operation, the interests of justice and good government might be best served by an order under section 98(5) of the Constitution suspending the order of invalidity to give the Legislature time to address the matter, given the severe financial impact on the Multilateral Motor Vehicle Accidents Fund. The court noted that the effect of declaring the provisions invalid would have such an inordinate effect on the financial structure of the Fund that the applicant's interests, though significant (given his serious injuries and deprivation of full compensation), might be outweighed. Third, the court confirmed its discretion to allow direct access and reviewed various circumstances in previous cases where direct access had been granted, reinforcing that each case depends on its particular facts.

This case is significant in South African constitutional jurisprudence as it confirms and applies the principle of non-retroactive application of the Constitution established in Du Plessis v De Klerk. It establishes that where liability for delictual damages accrued before the Constitution came into force on 27 April 1994, the Constitution cannot be used to expand that liability. The case also demonstrates the high threshold for exceptional circumstances that would warrant retroactive application of constitutional rights, particularly where such application would have severe financial implications for state welfare programmes. Additionally, the case reinforces the restrictive approach to granting direct access to the Constitutional Court, confirming that such access will only be granted in exceptional circumstances as set out in Rule 17(1) and previous Constitutional Court judgments.