Making sense of the demerit points system as a juristic person

July 1st, 2020
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It is common for a juristic person (a body recognised by the law as being entitled to rights and duties in the same way as a natural person) to own and use vehicles in the course of their business. These vehicles are often involved in traffic violations, such as exceeding the speed limit, and the fines are sent to the juristic person. It sometimes happens that the juristic person follows the ‘incorrect procedure’ of paying the fines without ensuring that the blame is allocated to the driver, who was driving the vehicle at the time of the incident. Continuing with the ‘incorrect procedure’ will lead to negative consequences that can hinder the operations of a juristic person.

The amendments to the Administrative Adjudication of Road Traffic Offences Act 46 of 1998 (the AARTO Act) will see the demerit points system coming into effect. Initially the speculated effective date was June 2020. This had road users scrambling to try and make sense of how this would impact them. The demerit points system, which will be implemented at a later stage, will not just have an impact on individuals, but also on juristic persons who own vehicles. It is, therefore, vital for juristic persons to stay abreast of these developments.

Once in effect, the demerit points system will allocate demerit points (ranging from one to six) to various traffic infringements as set out in the Administrative Adjudication of Road Traffic Offences Regulations, 2008 (the AARTO Regulations). Once in effect, all drivers will start with zero points and if the driver accumulates more than 12 demerit points (this is proposed to change to 15 points), their driver’s licence will be suspended for a period of three months for every point exceeding the limit. For example, if a driver accumulated 14 demerit points, their driver’s licence will be suspended for six months. A driver’s good behaviour on the road will reduce the demerit points at a rate of one point every three months.

The demerit points system does not substitute the payment of a fine. The AARTO Regulations set out the fines payable for various traffic infringements, together with the relevant demerit points linked to that infringement. For example, running a red light or skipping a stop sign will lead to a fine of R 500 and one demerit point.

The demerit points system is quite understandable for individuals, but there is still some confusion as to how this will affect a juristic person who owns and has their staff use the vehicles. One of the most frequently asked questions relates to whether a juristic person’s identified proxy will get the demerit points in their personal capacity.

A proxy is a dedicated person who takes responsibility for various matters relating to the vehicles of a juristic person, such as attending to traffic infringements, roadworthiness of the vehicles and so on. Regulation 336 of the National Road Traffic Act 93 of 1996 places a duty on a juristic person to identify and appoint a proxy. The AARTO Act and Regulations do not have a similar provision. However, a juristic person still needs a representative to attend to vehicle related matters and it cannot be assumed that a proxy must not be appointed due to legislation not making provision for it.

Even though notices for traffic infringements will be directed and addressed to the proxy, the question remains: What is the role of the proxy?

In the matter of Fines4U CC and Another v Johannesburg Metropolitan Police Department and Others 2014 (4) SA 89 (GJ), Gautschi AJ provided some clarity in para 24 when stating that:

‘The proxy cannot be prosecuted for the statutory transgression of the owner, the corporate body, but acts merely in a representative capacity’.

By stating that the proxy only acts in a representative capacity, one can argue that the proxy will also not get the demerit points in their personal capacity. However, it is necessary to look at the legislature’s intentions with this.

Currently, the AARTO Act and Regulations do not deal with the application of the demerit points system in a lot of detail. Amendments to the AARTO Act was signed into law on 13 August 2019 (commencement date pending) and in October 2019, new regulations were published in GN1319 GG42765/11-10-2019 for public comment (New Proposed Regulations). These amendments go into more detail and provide clarity on how the demerit point system might impact juristic persons.

Regulation 24(10) of the AARTO Regulations provides that juristic persons will not incur demerit points. However, this is about all that is said in respect of juristic persons and the demerit points system. It is, therefore, uncertain as to whether this means that demerit points will not apply at all or that it will only accrue to the driver of the vehicle owned by a juristic person.

The New Proposed Regulations (as it currently stands) provide some clarity and reg 18(4) states that in the case of a traffic infringement for a vehicle owned by a juristic person, the demerit points will be ‘allocated to that specific vehicle’. Unlike the suspension of an individual’s driver’s licence, it is the vehicle’s licence disc that is suspended (see reg 18(6)(b) of the New Proposed Regulations). This means that should the specific vehicle reach the demerit point limit, it does not disqualify a person to drive the vehicle, but rather that the vehicle is disqualified from being driven by anyone.

The New Proposed Regulations further explains in reg 20 that if the vehicle is suspended by being driven, the vehicle’s licence disc must be handed to the issuing authority. The issuing authority will keep the licence disc secured until the expiry of the suspension period and will provide proof of receipt. At the end of the suspension period, the juristic person (through its proxy) can apply to the issuing authority for the return of the licence disc.

There seems to be a misconception that the demerit points will immediately accrue at the issuing of the infringement notice. It is important to remember that the consequences of a traffic violation will generally only occur once the infringer admits guilt (by paying the fine) or is found guilty by a court. This is echoed in s 24(2) of the AARTO Act and reg 18(1) of the New Proposed Regulations, where it is stated that the demerit points will only accrue when –

  • the fine is paid, including partial or dishonoured payments;
  • the infringer elected to pay the fine in instalments; or
  • the infringer is found guilty by a court or an enforcement order has been authorised.

Seeing as demerit points will accrue once payment has been made, juristic persons must be careful to go ahead and pay a fine that has been issued for a vehicle that is owned by them. With the new demerit points system, it is not just the payment of a fine and it is over – the demerit points will accrue to the vehicle owned by the juristic person, and as discussed above, this can lead to the suspension of the juristic person’s vehicle licence disc.

It is one of the duties of a proxy to establish and keep a record of what the infringement/offence is and who the driver of the vehicle was at the time the infringement/offence occurred. The reason for this is that one must take responsibility for one’s actions.

Regulation 18 of the New Proposed Regulations states that it is not always the juristic person that will be liable for the traffic infringement. It firstly refers to vehicle-related infringements, such as failing to ensure that the vehicle is roadworthy. In this instance, both the juristic person and the driver of the vehicle at the time will be liable for the payment of the fines.

It secondly refers to camera captured traffic infringements, such as speeding. In this instance, both the juristic person and the driver of the vehicle at the time the incident took place will be liable for the payment of the fine. The infringement notice will be sent to the juristic person and the juristic person must nominate the driver of the vehicle at the time of the infringement (within the prescribed timeframe). If the juristic person does not nominate the driver, then the juristic person will remain liable for the infringement.

Juristic persons and their proxies should ensure that the actual infringer takes responsibility. Horwitz AJ explains this general duty in Van Rensburg v The City of Johannesburg [2008] 1 All SA 645 (W) when saying the following:

‘Traffic law enforcement, no less than other forms of law enforcement, is extremely important for society to function in a well-ordered manner. Allied to this is the need to ensure that people who drive on our roads not only obey the rules thereof but if they disobey those rules, they have respect for, and heed, those procedural laws which are essential to bring the wrongdoers to book.’

It is the duty of the proxy to ensure that the necessary representations are made to the issuing authority and to inform the issuing authority regarding the details of the driver in order to have the infringement notice be re-issued to the driver in their capacity. Apart from this duty, there are other duties a proxy of a juristic person must take into account while anticipating the demerit points system coming into effect, such as:

  • The proxy must ensure that all the provisions of the National Road Traffic Act and the AARTO Act are complied with.
  • The proxy must keep an updated register containing the particulars of all drivers or persons in control of the vehicles. Section 17(5) of the AARTO Act makes it a criminal offence if the driver’s particulars are not obtained.
  • The proxy must ensure that a driver does not drive the vehicle if their licence has been suspended. A juristic person must ensure that they get the written permission from the driver to access their records to monitor the status of the driver’s licence. A juristic person will also have to consider possible cost implications for accessing these records.

In light of the above, proxies can be at ease that intentions of the legislature seem to be that the demerit points will not accrue to them in their personal capacity. However, various other implications will come into play for a juristic person once the demerit points system comes into effect. Even though finer details of the demerit points system and the regulations must still be finalised, the information at hand gives a glimpse of what the intentions of the legislature are. This is enough for juristic persons to start planning and to ensure that the correct procedures are followed. Juristic persons might just as well begin to throw old habits out of the door and to implement some new practices, to make the transition easier.

George Pelser LLB LLM (Estate Law) (NWU) is the head of legal research at LegalWise in Johannesburg.

This article was first published in De Rebus in 2020 (July) DR 20.