Visser v Minister of Finance and Others (SA 89/2014) [2017] NASC 10 (06 April 2017);

Group

Full judgment

REPORTABLE

CASE NO: SA 89/2014

IN THE SUPREME COURT OF NAMIBIA

In the matter between:

ALFRED MEW VISSER

Appellant

and

 

MINISTER OF FINANCE

First Respondent

MOTOR VEHICLE ACCIDENT FUND

Second Respondent

EUROPCAR

Third Respondent

ATTORNEY-GENERAL

Fourth Respondent

 

Coram:                      Damaseb DCJ, Hoff JA and Frank AJA

Heard:                       22 March 2017

Delivered:                 6 April 2017

 

Summary:     The appellant instituted an action against the Motor Vehicle Accident Fund for compensation after being blinded in a collision with a motor vehicle.  The alleged damages or losses suffered by the appellant exceed N$9 million. The compensation payable by the Fund is however capped pursuant to Regulations published by the Minister resulting in appellant not being able to recover all his damages or losses from the Fund.

The appellant attacked the aforesaid cap averring that the Act constituting the Fund was unconstitutional in that it authorised the caps contrary to Arts 8 and 10 of the Constitution in that the failure to specifically categorise a different cap for persons with disabilities amounted to discrimination alternatively impacted on the dignity of disabled persons and also failed to recognise that disability fell within the concept of ‘social status’ as used in Art 10(2) of the Constitution.

The appellant, in the alternative attacked the Regulations issued pursuant to the Act which put the caps in place averring that the delegation to the Minister of those powers amounted to an impermissible delegation as the legislator delegated its legislative powers, that the Regulations were arbitrary, ultra vires and as it did not specifically provide for disabled persons it was contrary to Arts 8 and 10 for the same reasons articulated in respect of the constitutional challenge in respect of the Act.  The court held that neither the Act nor the Regulations were contrary to Arts 8 and/or 10 of the Constitution as there was no differentiation between or discrimination against equally positioned persons and hence it was not necessary to decide whether disability could be said to fall within ‘social status’ as used in Art 10(2).  The constitutional challenges thus failed.

As far as the challenges to the Regulations were concerned the court found that the delegation by the legislator to the Minister was properly circumscribed in the Act and it amounted to a permissible delegation. It held further that the Minister acted in a reasonable and rational manner when he determined the caps as well as within the powers delegated and hence the challenge to the Regulations similarly failed. 

 

 

APPEAL JUDGMENT

 

 

Frank AJA (Damaseb DCJ and Hoff JA concurring)

[1]        Appellant, at the time an able bodied teenager of 16, was riding on his motorcycle during the afternoon of 28 November 2004 when he was involved in a collision with a motor vehicle let by third respondent and driven by a German national. The said German national’s negligence was the sole cause of the collision. 

[2]        The appellant was seriously injured in the collision which, amongst others, resulted in him becoming totally blind. As a result an action was instituted to recover the appellant’s damages which is stated in the particulars of claim to amount to just over N$9 million. 

[3]        The second respondent (the second defendant in the court a quo) is a statutory body established pursuant to the provisions of the Motor Vehicle Accidents Fund Act, Act 4 of 2001 (the Act).  In terms of the Act and Regulations published pursuant thereto, the liability of second respondent (‘the Fund’) is capped.  These Regulations were published under the authority of the Minister of Finance (first respondent in this appeal and first defendant in the court a quo) as Government Notice 5 of 2003 and provided as follows:

‘Limitation of liability

1.         The liability of the Fund to compensate in respect of the different categories or heads of damages or loss as contemplated in section 10(2) of the Act is limited to the sum of –

(a)        N$100 000 for past hospital expenses;   

(b)        N$80 000 for past medical expenses; 

(c)        N$200 000 for future medical expenses; 

(d)        N$150 000 for past loss of earnings; 

(e)        N$150 000 for past loss of support; 

(f)        N$100 000 for future loss of earnings; 

(g)        N$100 000 for future loss of support; 

(h)        N$20 000 for funeral expenses;  and

(i)         N$100 000 for general damages.

Costs excluded. 

2.         The amounts referred to in regulation 1 do not include any sum of money awarded as costs in any legal proceedings instituted under this Act.’

[4]        Appellant was aware of the fact that the caps imposed on the liability of the Fund would affect the quantum of the amount he would be able to claim from the Fund and thus in his particulars of claim he attacks the Act and the Regulations on various grounds. He, amongst others, avers that the Act and the Regulations are contrary to the provisions of Arts 8 and 10 of the Constitution, that it infringed on his right ‘to have his case determined by an independent, impartial and competent court of law’, that the powers granted in the Act to the Minister of Finance (the Minister) amounted to an impermissible delegation of legislative powers and that the Regulations are ultra vires the provisions of the Act. (I interpose here to mention that it is the issue of the constitutionality that caused the Attorney-General to become a party to the proceedings).

[5]        The court a quo directed that the issues raised relating to the validity of the Act and the Regulations be dealt with in limine. This was done and evidence was presented on this aspect by the parties. The court a quo determined the matter and held against appellant and hence this appeal. 

[6]        In this court the appellant’s attack on the Act and Regulations was based on the grounds enumerated above save that the point that his rights would not be determined by an independent, impartial and competent court of law was not persisted with. The objections not persisted with in this court are not dealt with in this judgment as appellant clearly accepted that there were no merits in such grounds.    

[7]        First, second and fourth respondents in their pleas denied the contentions relevant to this appeal raised by plaintiff in his particulars of claim in general terms.  In this court this stance was repeated. Counsel for the mentioned respondents submitted that the delegation to the Minister to make regulations was properly done in the sense that the parameters within which the Minister could operate was clearly circumscribed and did not usurp the legislative powers of Parliament. They also defended the regulations as being intra vires the delegated powers, clear and rationally justifiable and with sufficient precision so as not to be categorised as vague.  Issue was also taken with the stance on behalf of appellant that the Act and the Regulations were contrary to Arts 8 and 10 of the Constitution. In this regard it was contended on behalf of first and fourth respondants that appellant had not shown that disability was a ‘social status’ for the purposes of Art 10(2) of the Constitution, which warranted special consideration. The position and reasons articulated by the court a quo in this regard were supported by counsel for second respondent.  Although supporting the position of first and fourth respondents the thrust of second respondent’s submission in respect of the aspect of the constitutionality of the Act and Regulations was that no question of discrimination arose at all as the appellant did not state on what basis this arose especially in view of the fact that the common law position to claim damages remained intact. 

[8]        The long title of the Act has as one of its objects to provide for the ‘payment of compensation to victims of motor vehicle accidents’ and s 2 of the Act after providing for the establishment of the Fund in s 2(2) reiterates the object as being: ‘to pay compensation . . .  as contemplated in s 10’. Section 10 starts off with the general approach namely that compensation would be paid where a person suffered loss or damages as a result of bodily injuries or death caused by the negligent or unlawful act of the driver of a motor vehicle. The amount of compensation that would be payable is not necessarily the amount of the damages or loss as s 10(2) provides as follows:

‘10(2)   The Minister, on the recommendation of the Board, may by regulation, provide, in such cases and on such basis as he or she may stipulate –

(a)        the different categories or heads or damages or loss under which compensation is payable under subsection (1); 

(b)        impose limitations on the liability of the Fund to pay compensation under any of the different categories or heads of damages or loss referred to in paragraph (a).’

[9]        The fact that the Fund was not necessarily a substitute for a damages claim against the wrongdoer is also evident from s 11 of the Act which provides for a claim against the wrongdoer for the difference between the damages or losses suffered and the amount received as compensation from the Fund. This section also provides that the amount received from the Fund cannot be claimed from the wrongdoer so as to avoid an overpayment of damages or losses from the wrongdoer who would not normally have been able to set off the amount received from the Fund against his/her liability due to such amount being res inter alios acta

[10]      As is also clear from the evidence of the Minister of Finance who caused the Government Notice to be published, the revenue of the Fund was such that it simply could not cater for full compensation to all claimants. It was a policy decision of his to rather cater for a wider number of claimants than have the Fund depleted by a relatively small number of big claims (usually by wealthier claimants) and leave the majority of claimants without any compensation. Furthermore, the allocations of the caps to the different categories mentioned in the Notice were also done after obtaining advice. In short, the Fund did not have unlimited resources and a decision had to be taken how the available funds would be allocated. The Minister decided to spread the compensation as wide as possible rather than deal with it on an unlimited first come first serve basis which would lead to the depletion of the resources and would have meant even lower caps and/or less categories for which compensation would be payable. 

[11]      As is evident from the wording of s 10(2) of the Act the Minister of Finance may by regulation ‘in such cases and on such basis as he or she may stipulate’ determine caps on the amount(s) of compensation payable by the Fund. The evidence of the Minister mentioned above clearly spells out the basis for the caps and the cases are evident from the Regulations itself. The caps would apply to cases (categories) mentioned therein. The categories are dealt with in some detail below.  The criticism raised against the Minister that he did not consider the ‘cases’ and ‘basis’ when he framed the Regulations are not supported by the evidence and the attack on the Regulations on this basis is in my view without merit. 

[12]      The fact that the Minister took the decision to cap the compensation payable and the manner in which he took it was clearly rational and justified from a policymaking perspective. This however will be of no avail if the powers delegated to him in this regard were unconstitutional in the sense that Parliament abrogated its legislative powers and functions and delegated it to the Minister. In other words, was there an impermissible delegation to the Minister by Parliament? 

[13]      It is trite that the legislature (Parliament) can delegate subordinate regulatory authority. There is probably no State where this is not done. This is one of the features of a modern State. It is also nothing new and there are numerous decisions from which this practice, which has never been queried in principle, is apparent.1  Of course, a delegee cannot act outside the scope of the powers delegated and the legislature cannot delegate the power to legislate. This latter point, albeit in a somewhat different context, was stated by Feetham JP, as far back as 1935 as follows:

‘Really the effect of the regulations is to make the Commissioner the legislator on the particular point with which the regulation seeks to deal, and such a delegation of authority is not a good delegation.’2

[14]      In the Act the Minister is given certain specific powers. He cannot act outside these powers. He is expressly given the power to regulate in respect of the matters mentioned. He has no arbitrary powers to decide on the subject matter of the regulations. These are stipulated in the Act.3 His discretion is further curtailed as he can only act on the recommendation of the Board of the Fund, which is the body in overall charge and control of the operations of the Fund and thus best suited to make recommendations. The Minister is further limited by the resources available to the Fund. The Minister must thus, based on the available resources and after receiving a recommendation from the Board, make a decision as to the categories of damages and the amount per category that should be paid in compensation, which compensation as pointed out in the judgment a quo is in essence part of the social security net for road users. The Minister is not taking over the legislative power of Parliament but must act within the clearly circumscribed parameters to make the determinations which the Act expressly authorises him to make. As stated by the court a quo, ‘the Minister was thus not assuming a plenary legislative function but rather implementing the legislative intention expressed in s 2 read with s 10 of the Act.’  In short, the Minister did not exercise an unfettered discretion but one that was clearly circumscribed and authorised. 

[15]      The reference to case law where comments were made about the vague nature of the phrase ‘public need an interest’4 cannot assist the appellant. This is so because the exercise of the discretion in this matter is much more clearly circumscribed as pointed out above. Furthermore the ‘categories or heads’ of damages or loss are fairly settled in practice and there is no danger that heads or categories can appear in the regulations which are unheard of. The fact that legal academics may have issues with how damages are/or should be categorised does not mean that certain categories have not crystallised and are used in practice. The categories referred to in the regulations list categories which represent most of the categories conventionally used when damages are sought. The category, general damages, in any event encompasses damages which some persons may specify separately such as pain and suffering and loss of future earnings (earning capacity).  The fact of the matter is that the categorisation of damages in delictual actions present well-known, convenient and established labels without any pretence at precision because these categories all make up the damages claim or claims.  Whatever differences there may be between the academics as to the extent that damages should be split up in different categories or whatever the niceties of law involved, there are a number of conventional categories and the Notice contains categories along these lines. The point is the Minister knows his discretion is curtailed and limited to recognised categories and he could not and did not go outside these. Furthermore, the categories of damages, irrespective of one’s view whether one should, e.g. claim general damages or pain and suffering and future loss of earnings separately (which can also fall under the category of general damages) is, as the court a quo found, well established in the law of damages.  Thus, to leave the determination of the ‘categories or heads’ of damages to the Minister did not leave it up to him to create new and unknown categories. He had to stick to the categories known in the law relating to delictual damages, which he did. 

[16]      It follows from the aforegoing that the attack on the validity of the regulations based on an impermissible delegation of powers to the Minister and on the Minister acting ultra vires such powers were correctly dismissed by the court a quo

[17]      When it comes to the constitutional challenge pursuant to Art 10 of the Constitution it is apposite that the Act be put in context. 

[18]      The injury or killing of another caused by the negligent or unlawful driving of a motor vehicle constitutes a delict. A damages claim will lie against the wrongdoer.  This is so by virtue of the common law. In seeking damages such damages must be proved and the amount of the damages depends on the facts of each case and the personal circumstances of each ‘victim’. Thus, a wealthy person’s loss of future income in a particular case will be substantially more than that of a pauper similarly placed. A young person’s loss of amenities of life will have a greater impact in monetary terms than such loss by an octogenarian. Similarly, a young person’s loss of future income must be calculated over a longer period of time than that of an elderly person. The measure of damages thus will vary from person to person and requires an individual assessment in respect of every claim for damages. Needless to say, a claim for damages lies against the wrongdoer principally and against no one else. I say principally because in certain circumstances where the wrongdoer acted as an agent or in his capacity as an employee, the principal or employer may also be liable. 

[19]      Because of the fact that the use of motor vehicles became prevalent with the concomitant rise in injuries caused by or arising out of such use, the need arose for the State, out of a sense of social responsibility, to intervene in the common law position. This development has been stated as follows:

‘[17]     . . .  As elsewhere in the world, statutory intervention to regulate compensation for loss spawned by road accidents became necessary because of an increasing number of motor vehicles and the resultant deaths and bodily injuries on public roads. The right of recourse under the common law proved to be of limited avail. The system of recovery was individualistic, slow, expensive and often led to uncertain outcomes. In many instances, successful claimants were unable to receive compensation from wrongdoers who had no means to make good their debts. On the other hand, it exposed drivers of motor vehicles to grave financial risk. It seems plain that the scheme arose out of the social responsibility of the State.  In effect, it was, and indeed still remains, part of the social security net for all road users and their dependants.’ 5

[20]      But for legislative intervention a ‘victim’ would only have had a remedy against the wrongdoer and not against anyone else. In the present matter: but for the Act appellant and any other ‘victim’ would have had no recourse against the Fund.  There is thus no pre-existing right against the Fund. The pre-existing right to damages arises in common law and against the wrongdoer. Had it not been for the Act the appellant and any other person similarly situated would only have had a common law delictual remedy.

[21]      For the reasons articulated by the South African Constitutional Court quoted above, the legislature decided to enact a social security net for road users which it did by passing the Act. Because of the limited reserves available the quantum of the social security available to affected persons was capped. As pointed out above, the rationale for the caps to provide at least some compensation for as wide a group of claimants as possible rather than depleting the Fund by meeting a few larger claims was a rational policy decision seeing the objective of the Fund in providing a social security net in cases involving the unlawful or negligent driving of a motor vehicle.

[22]      As is evident from the caps in place and the regulations, the caps apply across the board. To use the words of Art 10 of the Constitution there is no difference in the caps based on ‘sex, race, colour, ethnic origin, religion, creed or social or economic status’. No distinction is made between claimants at all. With regard to the test laid down by this court there is no differentiation between people or categories of persons at all.6 In fact, all claimants are in the same position when it comes to the capping of their claims and are thus equal before the law.

[23]      On behalf of appellant it is contended that the non-differentiation mentioned above in effect amounts to discrimination against disabled persons as their needs are greater than that of able-bodied persons and that disabled persons as a group qualify for protection because of their social status which status is expressly referred to in Art 10(2) of the Constitution. For this proposition reliance is placed on the reference by this court to an author who dealt with the issue as follows:

‘Non-discrimination may indeed be implied in mandates of equality.  But mandates of equality do not imply absolute equality without any distinction.  Equality, it has sometimes been said, means equal treatment for those equally situated and, indeed, equal treatment for unequals is itself a form of inequality.’7

[24]      Counsel for appellant submits that it follows from the above principle that the failure to cap the compensation for disabled persons at a higher rate than those for other claimants amounts to discrimination against them based on social status. The court a quo dismissed this submission by finding that disabled persons are not covered as such by the phrase ‘social status’.

[25]      The first question however is to determine whether the non-differentiation in the Act and the Regulations amounts to discrimination in the sense that there should have been such differentiation to avoid ‘equal treatment for unequals’. If there is no discrimination in this sense then there is no need to consider whether disability can be said to be a social status as envisaged in Art 10(2).

[26]      Insofar as the delictual claims are concerned these remain intact insofar as disabled persons are concerned and insofar as the damages exceed the capped amounts. As pointed out above, the special features relevant to disabled persons are taken cognisance of when his/her claim for damages is assessed. Insofar as the disabled person’s claim falls within the caps it is paid out in full. Whether a driver, e.g. unlawfully or negligently drives over the leg of a blind person or a person with full sight they are equally placed when it comes to a claim against the Fund. There is simply no question of unequals being treated equally or equal persons being treated unequally. Similarly situated persons are treated similarly. There is simply no discrimination when it comes to claimants against the Fund. They are entitled to claim the damages in common law which takes into account all the individual idiosyncrasies of such claimants as far as the amount of damages are concerned.  Insofar as the damages exceed the cap they are entitled to the cap and, insofar as it does not, they are entitled to compensation equal to their damages. There is no positive obligation on the State to do more than this even if the disability amounts to a social status. Without such obligation they are, like all other affected persons, only entitled to equal treatment which, as indicated above, is what the Act and Regulations provide for. 

[27]      It is thus irrelevant whether disability amounts to ‘social status’ for even if it does, there is no basis for the submission that the Act and/or the Regulations treat equally positioned persons differently or conversely treat persons unequally positioned equally. In fact, in view of what is stated above equally positioned persons are treated equally and the issue of differentiation does not even arise. Never mind discrimination in its pejorative sense.8

[28]      Once it is clear that the Act and Regulations do not discriminate against persons with disabilities but treat them as equals of all other claimants I cannot fathom how their dignity can be affronted.  In fact, this issue is raised by the appellant in the event it is found that disability does not constitute a ‘social status’. It is submitted that a failure ‘to treat differently persons whose situations are significantly different’ would constitute an affront to dignity of such persons. As pointed out above the situation does not arise in the context of claimants of the Fund.

[29]      To sum up. The legislator decided to create a social security net for road users so as to provide compensation to victims arising out of the unlawful or negligent driving of motor vehicles. This ameliorated the disadvantages of recourse in terms of the common law but which common law rights remain intact. The Fund was created but it was foreseen that it may not have the resources to compensate victims in full for the damages they suffered and hence provision was made for the capping of compensation by the Fund in lieu of common law losses or damages.  Where the damages or losses exceed the compensation from the Fund this excess could be pursued under the common law. In other words, no victim is worse off than he/she would have been prior to the Act being put in place. The Act, as a social security net operates only to the advantage of all those affected. There is thus no issue of differentiation between or discrimination against affected persons. Affected persons retain all the rights they had prior to the passing of the Act as well as thereafter. They only receive a benefit, namely the amount of compensation which they can now obtain from the Fund instead of pursuing the wrongdoer, if he/she can be found, and who may be a man of straw. Because of the fact that the Fund’s resources are limited the Minister, when he/she regulates caps on the compensation payable, on advice from the board of the Fund, discharges a duty which is rationally connected to a legitimate governmental objective. Provided he/she follows the requirements stated in the Act, there is nothing for the courts to question as it was Parliament that decided to address an issue it felt worthy of its attention by legislating on it and doing so in a manner that is not contrary to the provisions of the Constitution.

[30]      Insofar as the Act does not breach the Constitution it follows that neither do the Regulations which were authorised by the Act and which were validly issued within the parameters stipulated by the Act.

[31]      It thus follows that the court a quo correctly dismissed the appellant’s constitutional challenges to the Act and the Regulations.

[32]      Counsel for appellant submitted that the court a quo erred in awarding costs to the respondents (defendants) in that court as the matter was one of importance from a constitutional perspective and as such courts should not grant costs orders against persons seeking to exercise what they perceive to be their constitutional rights seeing the chilling effect this can have on litigants who wish to pursue litigation based on what they perceive to be their constitutional rights. Whereas there are merits in this submission this stance was admittedly not pursued or argued in the court a quo and this being the case I am not convinced that the court a quo erred in its discretion when it made the normal costs order, i.e. that costs would follow the result.

[33]      In the result, the appeal is dismissed with costs. Such costs to include the costs of one instructing counsel and one instructed counsel in respect of first and fourth respondents and one instructing and two instructed counsel in respect of second respondent.

___________________

FRANK AJA

___________________

DAMASEB DCJ

___________________

HOFF JA

APPEARANCES

APPELLANT:                                                  R Heathcote, SC (with him J Schickerling)

                                                                      Instructed by Francois Erasmus & Partners, Windhoek

FIRST and FOURTH RESPONDENTS:              N Marcus

                                                                      Of Nixon Marcus Public Law Office, Windhoek

SECOND RESPONDENT:                                N A Cassim, SC (with him U Hengari)

                                                                      Instructed by Tjitemisa & Associates, Windhoek   

______________________________________________________          

1Executive Council, Western Cape Legislature & others v President of the Republic of South Africa and Others 1995 (4) SA 877 (CC); Trustco Ltd t/a Legal Shield Namibia and Another v Deeds Registries Regulation Board & others 2011 (2) NR 726 (SC); Minister of Health and Social Services v Medical Association 2012 (2) NR 566 SC and Medical Association of Namibia & another v The Minister of Health SA 80/2013 [2017] NASC 9 February 2017 par [63].

2Natal Organic Industries (Pty) Ltd v Union Government 1935 NPD 701 at 715; See also Medical Association of Namibia case, above. 

3Section 10(2) of the Act.

4Medical Association of Namibia & another v The Minister of Health SA 80/2013 [2017] NASC 9 February 2017.

5Law Society of South Africa & another v Minister of Transport & another 2011 (1) SA 400 (CC) at para 17. 

6Müller v President of Namibia & another 1999 NR 190 (SC). 

7Mweb Namibia (Pty) Ltd v Telecom Namibia Ltd & others 2011 (2) 670 (SC) para 11 at 679I-J. 

8Müller case above at 201H to 202B.

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