Gallant v Minister of Safety and Security (CA 122/2007) [2008] ZAECHC 127 (23 July 2008)

Reportable

In the High Court of South Africa

(Eastern Cape Division) Case No CA 122/2007

(Grahamstown High Court)

In the matter between

GODFREY OSCAR GALLANT Appellant

and

THE MINISTER OF SAFETY AND SECURITY Respondent

JUDGMENT

Summary Appeal – action by a state institution against a state official for the recovery of loss caused to the institution by the negligent driving of a state vehicle by the official – magistrate called upon to rule on ‘the merits’ only – magistrate ruled in favour of the plaintiff on the merits with costs, his factual finding being that the damage was caused by the defendant’s negligence – having given this ruling the magistrate held that it was no longer competent for him to pronounce upon whether, on the merits, the plaintiff was permitted to recover this loss in terms of regulation 12 promulgated under section 76 of the Public Finance Management Act No 1 of 1999 – the quantum of damages having been settled in the interim, the magistrate gave judgment in favour of the plaintiff – in an appeal to the High Court, it was held that the defendant’s plea must be taken to have admitted that the defendant was liable in law to compensate the plaintiff in terms of the regulations, that that was no longer in issue on trial, and that the magistrate had ruled on the only remaining issue on the merits – further and in any event, the provisions of regulation 12 upon which the defendant relied did not afford a defence or preclude the plaintiff from recovering the loss from him – appeal dismissed.

JONES J

[1] This is an appeal against a decision of the magistrate’s court, Port Elizabeth in terms of which the magistrate entered judgment in favour of the plaintiff (the respondent on appeal) for payment of damages in the sum of R28 810-00 with interest and costs. I shall for convenience continue to refer to the parties as in the court below.

[2] The litigation arose out of an incident on 18 December 1999 in which a police vehicle belonging to the plaintiff and driven by the defendant, a policeman, was damaged when it left the road and overturned. The plaintiff suffered loss as a result. He alleged that this loss was caused by the defendant’s negligent driving, particular grounds of which were set out in paragraph 6 of the particulars of claim. One of his allegations (paragraph 6(e)) alleged that the defendant is liable in law to compensate him in terms of regulations 9.1.4 and 12.7.1 of the regulations promulgated under the Public Finance Management Act No 1 of 1999. A further allegation (paragraph 6(f)) was that the defendant is liable by reason of the provisions of regulation 12.3 because of his failure to comply with regulations 12.2.1(e) (i), (iii) and (v). This failure, it was alleged, means that he forfeited ‘State protection’, by which, I assume, is meant that he has forfeited an immunity from liability to the state because his use of the state vehicle was not authorized for official purposes.1

[3] The defendant’s plea admitted the identity of the parties, that the plaintiff sued in his capacity as head of a state ‘institution’ as contemplated by the regulations, and that the defendant was an ‘official’ as contemplated by the regulations. The occurrence of the incident giving rise to the alleged loss was not in issue. The defendant denied, however, that this incident was caused by his negligence, whether as alleged or at all, and alleged that it was caused by the reckless and/or negligent conduct of an unknown motorist (the factual basis being that he was blinded by the headlights of an approaching motor vehicle which was not identified). That was the only defence specifically raised in the defendant’s plea.

[4] The matter was set down for trial on 15 September 2006. The parties agreed to separate the issues of quantum the merits and to dispose of the merits first, and the magistrate ordered accordingly in terms of rule 29(4). Counsel for the plaintiff handed in two statements by the defendant as evidence. But their contents were not admitted and the statements were not proved. The magistrate’s reasons state that they accordingly had no evidentiary value and he did not take them into account in reaching a finding. Both parties then closed their case without leading evidence. The magistrate found for the plaintiff. His judgment dealt, inter alia, with the onus of proof and placed the onus on the plaintiff to prove that his version was acceptable. In discussing instances where the law places the onus on the defendant, he also referred to Jordaan v Bloemfontein Transitional Local Authority 2004 (3) SA 371 (SCA) which applies the rule of inferential reasoning that in cases where a number of inferences are possible from the known or admitted facts, where details of what happened are within the exclusive knowledge of only one of the parties, and where neither party gives an explanation, the court may select as the more probable inference that which is against the party with exclusive knowledge.His judgment proceeded as follows:

It is clear from the pleadings in the present case that the vehicle driven by the defendant left the road and overturned. This gives rise to two possible inferences: (a) that the defendant was negligent; or (b) that some unknown driver of another vehicle had placed the defendant into a situation of sudden emergency, and that despite exercising such reasonable care and skill as may be expected of a reasonable man under the circumstances of a particular emergency (see SAR v Symington 1935 AD 35 at 45), he was unable to prevent his vehicle from leaving the road.

The Supreme Court of Appeal held in the Jordaan case at 379G-H that under such circumstances the trial court is entitled to select the explanation which favours the plaintiff, in the absence of evidence of the defendant.

The magistrate followed Jordaan’s case and selected as the more probable and acceptable inference the one which favoured the plaintiff, i.e. that the defendant was negligent. He accordingly entered judgment on the merits in favour of the plaintiff. His written judgment was handed down on 18 September 2006.

[5] The matter was then set down for hearing on quantum 23 January 2007. When it was called the parties advised the magistrate that they had settled quantum. However, the defendant’s attorney attempted to revisit the issue of liability by raising the applicability of the regulations. He argued that the negligence issue arose only after the plaintiff had brought his claim within the ambit of the regulations. The regulations prescribe the circumstances under which the defendant, as an official, is liable to the plaintiff, as an institution, for loss or damage caused to the plaintiff. The argument was that in the circumstances a ruling by the magistrate was required as to whether the defendant was indeed answerable for this loss in terms of the regulations. He submitted that in accordance with the provisions of regulation 12.7.3 the plaintiff was obliged to waive its claim against the defendant if the provisions of section 12.2.1 (b) to (e) were applicable, and this in turn made it incumbent on the plaintiff to prove that they were not applicable. The defendant would only be liable for damage to the vehicle, so the argument went, on proof that the defendant had not used the vehicle for authorized official purposes, or in the interests of the state, or that he had not deviated from the official journey or route without prior authorization. His submission was that this part of

the merits issue had not been resolved by the magistrate’s ruling, which was confined entirely to the issue of negligence. The magistrate declined to entertain this argument at that late stage. In his reasons he confirmed the concession by the defendant’s attorney that neither the plaintiff nor the defendant had raised or argued the point about the regulations at the hearing of 15 September 2006,2 and it seems clear that everybody had assumed that a reference to the merits in the order separating the issues was confined solely to whether the defendant’s wrongful and negligent conduct had caused the damage. The magistrate held, in effect, that in these circumstances he was functus officio on the merits and was hence not competent to depart from his ruling granting judgment in favour of the plaintiff on the merits.

[6] I am not certain that the magistrate was correct in holding that he was functusofficio. It may still have been open to him to reconsider the issue of liability in the light of what the regulations say, if that fell within the framework of the issues referred to him and if his ruling did not deal with it at all. But it seems to me that on a proper reading of the pleadings that issue was not one of the issues referred to him as part of the merits, and that his conclusion was correct and should be supported. This is not a case, such as Local Transitional Council of Delmas v Boschoff (5) SA 514 (SCA) upon which the defendant relied, where the trial court misinterpreted its order separating the issues of merits and quantumby wrongly confining the merits stage of the proceedings solely to an enquiry into the issue of culpa, without considering and resolving the elements of wrongfulness and causation, which were also in dispute. Here, the plea placed in issue only the question of causal negligence (which, as so often happens in practice, embraces by implication the wrongfulness element of the cause of action as well as fault). The pleadings did not raise possible defences under the regulations as a triable issue. Paragraphs 1, 2, 3, and 4 of the particulars of claim gave a description of the parties which included an allegation (a) that the plaintiff was the nominal head of an

‘institution’, being an institution of state as contemplated by the regulations; and (b) that the defendant was in the plaintiff’s employ and an ‘official’ as contemplated by the regulations. These allegations were admitted. Paragraph 5 alleged that a collision occurred while the defendant was driving the plaintiff’s vehicle. The plea denied that what happened was a collision, but admitted that the vehicle in question left the road and overturned whilst he was driving it. Paragraphs 6 and 7 of the particulars of claim set out the cause of action, paragraph 6 alleging that the sole cause of the damage to the vehicle was the defendant’s negligence, and paragraph 7 alleging that as a result the plaintiff suffered loss in the amount of R31, 685-00. Paragraph 6 is not a model of clarity. It reads:

6 The sole cause of the collision is due to the negligence of the defendant in that:

he drove at a horrific speed;

he failed to keep a proper lookout;

he failed to manoeuvre the vehicle to avoid a collision;

he failed to apply brakes when he should have to avoid a collision; at the time of the collision the defendant was on duty and acting in the course and scope of his employment with the plaintiff

alternatively, in the event of the Court holding that the defendant was not on duty, the plaintiff alleges that the defendant is liable in law to compensate the plaintiff for the loss suffered in terms of the regulation 9.1.4. read with the regulation 12.7.1 of the Treasury Regulations promulgated in terms of section 76 of the Public Finance Management Act No 1 of 1999;

(f) in terms of regulation 12.3 of the Treasury Regulations, defendant is also liable to compensate the plaintiff for the loss aforesaid since he had forfeited State protection because of a failure to comply with Regulations 12.2.1.(e) (i), (iii), (v) of the Treasury Regulations.

The difficulty lies with sub-paragraphs (e) and (f). The allegation in paragraph 6(e), incorporating regulations 9.1.4 and 12.7.1, has been lumped together with the other grounds of negligence but they have no apparent bearing on the issue of negligent driving. They say that regulation 12 shall regulate the liability of an official for damage caused by him to an institution and that the loss must be recovered from an official if he is liable. Paragraph 6(f) refers to regulations 12.3 and 12.2.1 (e) (i), (iii) and (v), which are irrelevant to the issue of negligence and the other issues in this case.3 The defendant was understandably perplexed. His request for further particulars pointedly called upon the plaintiff to state on what grounds it was alleged that the allegations about the regulations constituted negligence. The plaintiff replied simply by annexing a copy of the regulations. He gave no further explanation. His reply did not therefore deal with the point of the request. The defendant and the court were left to wonder how the allegations set out in paragraphs 6(e) and (f) could conceivably constitute negligence that caused or contributed to the damage. For the purposes of pleading, these allegations do not make sense.

[7] The defendant gave answer to paragraph 6 by repeating his denial of a collision. He went on to allege that in any event the vehicle’s leaving the road and overturning was not the result of his negligence, whether as alleged or at all, and, further, that it was caused by the reckless and/or negligent conduct of an unknown motorist. The plea contained no reference to any statutory protection or immunity, and it did not admit or deny the allegation that the plaintiff’s claim fell within the regulations or that the defendant had forfeited any protection afforded by the regulations by reason of his unauthorized use of the vehicle.

[8] The result was a plea which specifically set out only one defence. This was a denial that the defendant negligently caused the collision on any of the grounds alleged, and an allegation which set up instead that the collision was caused by the reckless or negligent conduct of another. It did not expressly raise a statutory protection or immunity arising out of the regulations. I do not believe that it is reasonably capable of being interpreted to raise any such statutory defence by necessary implication. On the contrary, in terms of the ordinary rules of pleading the plaintiff’s allegation that the defendant is liable in terms of the regulations must be taken to be admitted. It is well known that the duty of a pleader is not to answer an allegation in his opponent’s pleading evasively; he must answer the point of substance. Magistrates’ courts rule 19(4) says that a defendant shall do so either by admitting, or denying, or confessing and avoiding all the material facts alleged in the particulars to the summons, and shall clearly and concisely state the nature of his defence and all the material facts on which it is based. Magistrates’ courts rule 19(6) states that ‘a bare denial of liability or a defence of general issue shall not be admissible, but the defendant may, either as a sole defence or in combination with any other defence not inconsistent therewith,

deny specifically any of the allegations in the summons’ (my underlining). The important result of a failure to comply with the rules is set out in magistrates’ courts rule 19(10). This rule says that every allegation of fact by the plaintiff which is inconsistent with the plea shall be presumed to be denied and every other allegation shall be taken to be admitted. The plaintiff’s allegations relating to the applicability of the regulations are not inconsistent with a defence that the damage was caused by the negligent conduct of a third party and not the defendant. In terms of rule 19(10), they must therefore be taken to be admitted, (subject to the qualification, especially in respect of paragraph 6(f), that as a matter of common sense the admission or denial of an irrelevant allegation is of no practical consequence, and the deemed admission of irrelevant or inapplicable allegations does not make them relevant or applicable).

[9] To recap, the plea did not raise a special defence arising out of the regulations. Because the allegations in paragraph 6(e) and (f) are patently not allegations of negligence, they are not covered by the denial in the plea that the defendant was negligent, whether as alleged or at all. Further, the plea contained no express denial of the allegation that the plaintiff’s claim was properly made in terms of regulations 9.1.4 and 12.7.1. Its failure to deny this allegation amounted to an admission. It was in essence an admission that the relationship between the parties regulated the circumstances under which the plaintiff can recover loss from the defendant, and that the defendant was liable in terms of regulation 12.7.1. In my view, therefore, any possible issue arising out of the applicability of the regulations was eliminated at the pleadings stage. The magistrate determined the only remaining issue. The correctness of his finding on that issue is not before us on appeal. The appeal must fail on this basis.

[10] During the course of presenting his argument for the defendant Mr Jooste professed an uneasy feeling that justice would not be done in this case by an acceptance of a technical argument based on what the defendant is taken to have admitted and denied in his plea. This is because, he submitted, the result will be to deny the defendant the benefit of a defence which would otherwise have exonerated him. I agree that the ends of justice are not served by denying relief purely on technical deficiencies and presumptions relating to the way in which the pleadings were formulated. For this reason, counsel’s fears should be addressed, even though it may not be strictly necessary. I shall therefore proceed to do so. I believe that the defendant has not been denied the benefit of a statutory defence arising out of the regulations. This is because, even if the defendant is not taken to have admitted the plaintiff’s allegations about the regulations, the regulations, properly interpreted and understood, do not afford him the defence that was sought to be raised on his behalf by his attorney at the trial.

[11] The Act and regulations impose a duty on officials to use reasonable care to avoid unauthorized, irregular, fruitless and wasteful expenditure, and they lay down procedures for the recovery of loss wrongfully caused by officials who fail in their duty. Regulation 9.1.4 provides that the recovery of such loss must be dealt with in accordance with regulation 12. Regulation 12 commences by recognizing the state’s function as its own insurer. Regulation 12.1.1 lays down the general principle that the state will bear its own damages and accident risks and be responsible for all claims and losses of state property where these arise from state activities by an official who is liable in law and who is or was employed by a state institution.4 However, this principle is to be applied subject to the regulations, which, in regulation 12.7, provide in direct terms for the recovery of loss and damage from officials whose wrongful conduct makes them liable in law. Regulation 12.7.1 is unambiguous. It says that ‘losses or damages suffered by an institution because of an act committed or omitted by an official must be recovered from such an official if that official is liable in law’. This covers the situation in this case; the loss was allegedly suffered by the institution because of the act of the defendant, who was an official and who is liable for it at common law. Regulation

12.7.1 must be read with regulation 12.7.3 which provides that ‘a claim against an official must be waived if the conditions in paragraph 12.2.1 (b) to (e) are met’. This is the regulation upon which the defendant’s attorney relied. As I have said, this argument is summarised above and was also contained in the written submission (annexure B) presented by the attorney after the ruling on the merits was handed down and before judgment was finally given. It is the only regulation he relied upon, and counsel has not suggested that any other regulation may assist the defendant. The position under the applicable regulations, then, is that the plaintiff’s loss must be recovered from the defendant unless the plaintiff is obliged to waive his claim against the defendant because the conditions set out in regulation 12.2.1 (b) to (e) are met.

[12] The conditions set out in clauses (b) to (e) of regulation 12.2.1 are provisos to regulation 12.2.1. They apply only in cases where regulation 12.2.1 is applicable. Regulation 12.2.1 is part of a regulation dealing with claims against the state,5 and is not applicable in the circumstances of this case. The prerequisites for its operation are not present. The regulation reads:

12.2.1 An institution must accept liability for any loss or damage suffered by another person, as for a claim against the state, which arose from an act or omission of an official, provided-

the act or omission was the cause of the loss, damage or reason for the claim;

the act or omission did not involve the use of alcohol or drugs;

the official acted in the scope of his or her employment and was not reckless, wilful or malicious;

the official did not fail to comply with or ignore standing instructions, of which he or she was aware of or could reasonably have been aware of, which led to the loss, damage or reason for the claim, excluding damage from the use of a state vehicle; and

in the case of a loss, damage or claim arising out of the use of a state vehicle, the official-

(i) used the vehicle with authorization for official purposes;

(ii) possesses a valid driver’s licence or other appropriate licence;

(iii) used the vehicle in the interests of the state;

(iv) did not allow unauthorized persons to handle the vehicle;

(v) did not deviate materially from the official journey or route without prior authorisation; and

(vi) did not, without prior consultation with the State Attorney, make an admission that was detrimental to the state.

The clear wording of the regulation makes it applicable in a case where, subject to the provisos, the institution is obliged to accept liability for loss or damage suffered by a third person as a claim against the state, if it arose from the act or omission of an official. Its plain meaning does not give it application to a case such as the present where the loss is suffered, not by another person, but by the institution or the state itself. I can find no justification for giving it a more extended meaning so that the proviso portion (all the words following the word ‘provided’) would be applied disjunctively from the initial portion of the regulation and without making a claim by a third person a condition precedent to their operation. The regulation must be interpreted to give expression to the complex role played by the state in a scenario such as this, where it litigates as a government institution, the victim of loss or damage, the employer of its officials, the person vicariously liable to outsiders for their wrongful conduct, and a self-insurer. There are sound reasons of policy in these circumstances why the state, as self insurer, should be liable to the injured party without an ordinary right of subrogation against the wrongdoer, except in the circumstances set out in (b) to (e). It is placed in much the same position as a prudent commercial undertaking which

insures itself against liability to third parties and whose servants are covered by the insurance. There are no corresponding reasons of policy why a state institution should be regarded as an insurer without subrogation where it suffers loss, not vicariously, so to speak, as an employer, but directly as victim of the wrongful act or omission of its officials. There are no sound reasons of policy, in these circumstances, why an official should get special protection because the state is not insured, or why the state should waive its ordinary claim for recourse, either as a victim or a self-insurer, in favour of an official who is liable in law. The state and the official are here in much the same relationship as a prudent commercial undertaking and its employee.

[13] My conclusion is, therefore, that regulation 12.7.3’s incorporation of the conditions of regulation 12.2.1 (b) to (e) does not oblige the plaintiff to waive this claim against this defendant. It does not give the defendant any protection or immunity from liability for this claim. It can have no bearing on the issues which arose in the litigation between the plaintiff and the defendant. This is so as a matter of law, regardless of the incidence of the onus of proof or the allegations made by the parties in the pleadings or whether or not the magistrate was functus officio.

[14] In the result the appeal is dismissed, with costs.

RJW

JONES

Judge of the High Court

23 July 2008

ROBERSON AJ: I agree.

JM ROBERSON

Judge of the High Court (Acting).

LEGAL REPRESENTATIVES –

Appearances:

for the Appellant(s): ADV: P. Jooste

for the Respondent(s): ADV: I. Dala

Instructing attorneys:

Appellant(s):

NETTLETONS

ATTORNEYS

Respondent(s): MLONYENI & LESELE INC.

CASE INFORMATION -

Nature of proceedings :

APPEAL

1 This judgment deals more fully with the regulations and the pleadings in paragraphs 6 and 7 below. Paragraph 6(e) and (f) of the pleadings call themselves grounds of negligence but they are not.

2The magistrate was also motivated by the failure of the plea to raise a defence arising out of the regulations.

3 Regulation 12.3 is headed ‘Claims by the state against other persons’ and it provides that ‘if the state suffers loss or damage and the other person denies liability, the accounting officer must, if deemed economical, refer the matter to the State Attorney for legal action’. I do not see how it is relevant or applicable. This is not a case of a claim by the state against a third person. It is a claim by the state against an official, for which provision is made elsewhere in regulation 12. I suspect that the pleader may have had regulation 12.7.3 and not regulation 12.3 in mind when he formulated paragraph 6(f). This is because it is regulation 12.7.3 which brings in regulations 12.2.1 (e) (i), (iii) and (v). But these regulations are also irrelevant and inapplicable in the context of this case. Their inapplicability is dealt in paragraphs 10, 11 and 12 of this judgment.

4Regulation 12.1.2 permits the state to take out limited supplementary insurance to ease its burden.

5 Regulation 12 is deliberately constructed. Regulation 12.2 deals with claims by third parties against the state; regulation 12.3 with claims by the state against third parties; regulation 12.4 with claims by officials against the state; and regulation 12.7 with claims by the state against officials.