Mbele v Road Accident Fund

On 7 July 2006, the appellant was injured in a motor vehicle collision. He instituted action proceedings against the Road Accident Fund (the Fund) in terms of section 17(1) of the Road Accident Fund Act 56 of 1996 (the Act) in 2007. The claim was settled and made an order of court on 21 April 2009, including payment of over R2 million for general damages and costs. Prior to settlement, on 23 October 2008, the Fund made an undertaking in terms of section 17(4)(a)(i) of the Act to compensate the appellant for future medical and hospital expenses after costs were incurred and upon proof. Around October 2010, the appellant requested payment for hospital and medical expenses (received by the Fund in November 2010), but no payment was made. On 10 April 2013, the appellant served summons claiming R94,063.28 for medical expenses allegedly incurred around June 2009. The Fund raised a special plea of prescription, arguing the claim prescribed within three years (by July 2012) under the Prescription Act 68 of 1969.

• Whether a claim for future medical expenses based on an undertaking in terms of section 17(4)(a)(i) of the Road Accident Fund Act is subject to prescription under the Prescription Act 68 of 1969 or section 23(3) of the Road Accident Fund Act
• Whether the undertaking creates a separate and independent contractual obligation or forms part of the unitary claim under section 17(1) of the Act
• What the effect of the 2008 amendment to section 23(3) of the Road Accident Fund Act is on prescription of undertakings
• When does a complete cause of action arise for claims covered by an undertaking for future medical expenses

The appeal was upheld with costs. The order of the High Court (Western Cape Division, Cape Town) was set aside and substituted with: 'The special plea of prescription is dismissed with costs.'

A claim for future medical expenses based on an undertaking in terms of section 17(4)(a)(i) of the Road Accident Fund Act is not subject to prescription under the Prescription Act 68 of 1969. Instead, section 23(3) of the Road Accident Fund Act (as it read prior to its 2008 amendment) is applicable, providing a five-year prescription period. The undertaking does not create a new and independent contractual obligation or a separate cause of action. Future medical expenses constitute an integral and indivisible part of a third party claim for damages under section 17(1) of the Act. For prescription purposes, the complete cause of action in respect of future medical claims covered by an undertaking arises when the costs are actually incurred (not at the time of the accident), as the Fund is only obliged to compensate the third party 'after the costs have been incurred and on proof thereof' under section 17(4)(a)(i). The five-year prescription period runs from the date the medical expenses are incurred.

The court observed that it is a startling proposition that claims in terms of an undertaking under the Act do not prescribe at all, noting that the law encourages finality in litigation and no claim can exist indefinitely. The court emphasized that the Road Accident Fund Act was established to give the greatest possible protection and to promote the socio-economic rights of victims of motor vehicle accidents, and must be construed at all times to give access to courts and justice rather than to limit access to justice. The court noted that section 21(IC)(a) of the Compulsory Motor Vehicle Insurance Act 56 of 1972 was the predecessor of section 17(4)(a) of the Road Accident Fund Act, representing an innovation and departure from common law delictual claims. The court also stated that there is a clear reason for the difference between the Prescription Act and the Road Accident Fund Act - the latter is tailored for the specific area of claims for compensation against the Fund for road accident injuries, whereas the Prescription Act regulates prescription of claims in general.

This case is significant in South African jurisprudence as it clarifies the prescription regime applicable to claims for future medical expenses based on undertakings issued by the Road Accident Fund under section 17(4)(a)(i) of the Road Accident Fund Act. It establishes that such claims are not subject to the general three-year prescription period under the Prescription Act 68 of 1969, but rather to the five-year period under section 23(3) of the Road Accident Fund Act. The judgment emphasizes that the Road Accident Fund Act is a specialized legislative regime designed to provide maximum protection to victims of motor vehicle accidents, and must be construed to promote access to justice rather than limit it. The case also clarifies when a complete cause of action arises for undertaking-based claims (when costs are actually incurred), and confirms that future medical expenses do not constitute a separate claim but form an indivisible part of the original delictual claim.