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[2016] ZASCA 72
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Masemola v Road Accident Fund (256/2015) [2016] ZASCA 72 (25 May 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
No: 256/2015
DATE:
25 MAY 2016
Not
Reportable
In
the matter between:
DEBBIE
MAHLAKU MASEMOLA
…..........................................................................
APPELLANT
And
ROAD
ACCIDENT
FUND
............................................................................................
RESPONDENT
Neutral
Citation: Masemola v Road Accident Fund (256/2015)
[2016] ZASCA 72
(25 May 2016)
Coram:
Tshiqi, Swain and Dambuza JJA and Baartman and Kathree-Setiloane AJJA
Heard:
17 May 2016
Delivered:
25 May 2016
Summary:
Delict – claim for future loss of earnings – applicable
contingency percentage rate to be deducted for pre-morbid
future loss
of earnings – discretion of the trial court to make a
subjective estimate – court of appeal may not interfere
unless
the trial court has misdirected itself – contingency percentage
rate to be deducted reduced.
ORDER
On
appeal from: Gauteng Division of the High Court, Pretoria (De Klerk
AJ sitting as court of first instance):
1.The
appeal is upheld with costs, including costs consequent upon the
employment of two counsel.
2.The
order of the court a quo is set aside and in its stead is
substituted:
‘
(a)
The pre-morbid contingency to be deducted for future loss of earnings
is 10 per cent.
(b)
The defendant is ordered to pay the plaintiff’s costs including
the costs of the plaintiff’s experts.’
JUDGMENT
Tshiqi
JA (Swain and Dambuza JJA and Baartman and Kathree-Setiloane
concurring)
[1]
On 1 November 2011 the appellant, plaintiff
in the court a quo, Mrs Debbie Mahlaku Masemola was a passenger in a
motor vehicle,
when it collided with another one along Mmameng road
travelling towards Marble Hall in the Limpopo Province. As a result
of the
accident she sustained head injuries, soft tissue injuries to
her neck and right elbow, and also multiple abrasions and lacerations
to her face.
[2]
The Road Accident Fund (RAF), the defendant
in the court a quo and the respondent in the present appeal, has
conceded 100 per cent
of the merits in her favour, and has undertaken
to furnish her with an undertaking in terms of
s 17(4)
(a)
of the
Road Accident Fund Act 56 of
1996
, to cover her past and future medical expenses. Regarding the
claim for loss of earnings, the parties could not agree on the
percentage
to be deducted for pre-morbid contingencies but agreed
that the basis for its calculation was the actuarial report by Johan
Sauer
Actuaries and Consultants and would be argued on the basis of
the report of the Industrial Psychologist, Mr Louis Linde (the Linde
report). The actuarial report was prepared on the basis of the Linde
report and contains certificates showing calculations for
pre-morbid
and post-morbid contingency deductions for past and future loss of
earnings. The parties then approached the Gauteng
Division, Pretoria
(De Klerk AJ) and requested it to adjudicate on that outstanding
issue and presented it with the actuarial report
and the certificate
reflecting the calculations. The court was not asked to determine the
quantum for the parties as it was agreed
that this would be
calculated by the parties themselves once the court had determined
what percentage deduction was applicable.
[3]
However, despite being appraised of the
agreement, it erroneously considered the issue it had to decide to be
‘the quantum
of the plaintiff’s claim for future loss of
earning capacity’ but nevertheless stated that ‘the gist
of the dispute
was the assessment of a proper allowance for
contingency’. It concluded that ‘a figure of 15 per cent
would meet the
case’ and that ‘its findings would result
in an award of a round figure of R406 000 for loss of future
earning
capacity’. It then ordered the defendant to pay the
plaintiff’s costs including the costs of her experts.
[4]
Once it became apparent that the court a
quo had not only misconceived the nature of the order sought by the
parties, but also made
an arithmetical error, the appellant’s
legal team was instructed to file an application for leave to appeal
the order of
the court a quo. The appellant’s legal team,
realising that such further litigation would delay the finalisation
of the matter,
and in an attempt to avoid incurring further costs to
the detriment of the appellant, approached the RAF’s legal team
with
a view to settling the matter amicably between the parties.
After numerous enquiries, the appellant’s legal team was
informed
by the RAF’s legal team that the RAF was not prepared
to settle the matter and that it stood by the court a quo’s
judgment.
[5]
The
appellant therefore lodged its application for leave to appeal
together with an application for condonation as it was out of
time.
[1]
It cited two grounds:
First, that the court a quo erred in finding that the contingency
percentage rate to be deducted for pre-morbid
future loss of earnings
should be 15 per cent; and second, that it erred in its calculation
and the awarding an amount of R406
000 for loss of future earning
capacity, contrary to what had already been agreed upon by the
parties. The application for condonation
was refused with no order as
to costs.
[6]
This appeal is with the leave of this
court. And it turns on the contingency percentage rate to be deducted
for the calculation
of the appellant’s pre-morbid future loss
of earnings and the setting aside of the erroneous award made by the
court a quo
for future loss of earnings.
[7]
The appeal was not opposed albeit that the
attitude of the RAF remained that it was not prepared to settle the
matter. We were informed
by counsel from the bar that attempts to
settle the matter continued until the day before the hearing as the
appellant’s
legal team still wished to avoid unduly burdening
the appellant with costs. There is no reason to disbelieve counsel
for the appellant
because in his affidavit in support of the
application for condonation that served before the court a quo, he
also outlines the
attempts made in order to resolve the matter
amicably and it was not denied by the RAF. Counsel also informed us
that although
the appellant had argued for a contingency deduction of
10 per cent as recommended by the actuary and was not entirely happy
with
the higher contingency deduction of 15 per cent, the main issue
raised with the RAF was the patent arithmetical error made by the
court a quo, and the appellant was willing to settle the matter at
that rate in order to avoid incurring further costs of the appeal.
[8]
It would have made perfect sense for the
parties to simply correct the error and settle the matter as proposed
by the appellant
without incurring the further costs of the appeal.
According to the actuarial calculation, the award payable if a 15 per
cent contingency
deduction is made is R552 748.60 and if a 10 per
cent contingency deduction is made, it is R593 924. The
difference between
the two amounts is R41 175.40 and the legal
costs occasioned by this appeal obviously exceed that amount. It is
thus not clear
on what conceivable basis the RAF refused to settle
the matter when it was clear that the court a quo had not only
misconceived
the issue it was required to determine, but also made an
obvious error that could not be justified in anyway on the basis of
the
actuarial report that the parties had presented to the court by
agreement as a basis for its determination. I say so because the
actuarial calculations presented to the court show that if a 15 per
cent contingency deduction is made for pre-morbid future loss
of
earnings, the award would be R552 748.60, and not R406 000.
[9]
It is regrettable that the RAF has wasted
money that should have otherwise been efficiently used to pay for the
claimants in an
appeal like this. Meanwhile Mrs Masemola, has been
made to wait unnecessarily, for lengthy periods for her matter to be
finalised.
I can only hope that the RAF will prioritise this matter
to avoid further injustice to her.
The
contingency percentage deduction
[10]
The Linde report states that Mrs Masemola
left school after passing grade 10 and that she was a full-time home
maker until she worked
as a domestic worker for two years. She
resigned from that position because she was expecting her second
child. She completed a
three week security training course and
registered as a grade C security service provider with the Private
Security Industry Regulatory
Authority (PSIRA). She also completed a
six months’ certificate in early childhood development and
obtained a learners’
driving licence.
[11]
At the time of the accident, Mrs Masemola
was a full-time home maker but would, according to the Linde report,
have chosen to pursue
a career as a security service provider, had
the accident not occurred, hence a qualification in that industry.
She would have
entered the industry at a grade E level and would have
probably been promoted to grade C level approximately three to five
years
after that. That level would probably have been her ceiling
until retirement. After the accident, she secured part time
employment
with a local community work programme, Mvula Trust, where
she worked for two days a week doing cleaning, gardening and
assisting
school children to read and write. She is also employed on
a part-time basis as a domestic worker on a once weekly basis.
[12]
According to the Linde report, Mrs Masemola
has suffered partial past and future loss of earnings and earning
capacity resulting
from pain and discomfort, and may probably need
further surgery in future. Her employment prospects have been limited
and she is
now probably suitable for sedentary, light, and moderate
physical work. She is presently not able to perform her household
chores,
or stand for long periods without assistance or without
suffering dizziness and nausea and as a result, employment as either
a
security officer or full-time domestic worker will no longer be
viable. Her part-time employment with Mvula Trust was on a contract
basis and was due to come to an end in 2014. Then she would have to
rely on her one-day-a-week employment as a domestic worker.
Her
prospects of re-employment in that position or any other position
would be adversely affected by the fact that most tasks cause
her
backache, while long hours and in the sun cause her a headache.
[13]
The actuarial report, in calculating her
future loss of income, assumed that she would have commenced work as
a grade E security
guard. For pre-morbid contingency deductions for
future loss of income, the actuary applied 10 per cent contingencies
and 15 per
cent for post-morbid contingency deductions.
[14]
It is trite that the determination of
allowances for contingencies involves, by its very nature, a process
of subjective impression
or estimation rather than an objective
calculation. Thus, whenever allowances on which judicial opinions may
vary appreciably,
this court will not interfere with a determination
made by a trial court and substitute it with its own estimates,
unless the trial
court misdirected itself in some material respect,
or if this court’s own estimates and those of the trial court
are strikingly
disparate, or else where this court is otherwise
firmly convinced that the trial court’s estimates are wrong.
(See
Shield Insurance Co Ltd v Booysen
1979 (3) SA 953
(A) at 965G-H.)
[15]
The court a quo accepted the Linde report
and opinion expressed in it, that had the accident not happened, the
appellant would probably
have returned to the open labour market as a
security officer, and that now that the accident has happened, she
would not be able
to engage in employment as a security officer nor
as a full
-
time
domestic worker. It also noted that one of the factors it had to
consider in exercising its discretion was a possibility that
the
plaintiff may have less than a normal life expectancy. Despite
acknowledging all those factors the court imposed a higher deduction
of 15 per cent. In so doing the court a quo erred.
[16]
The appellant is clearly an ambitious woman
who aimed to improve her employment prospects so that she could fend
for herself. Whilst
raising her children she was not content with
simply being a full-time home maker but commenced employment as a
domestic worker
for two years, and only resigned because she was
expecting her second born child. She also had ambitions of being a
security officer
and thus completed security training and registered
as a grade C security service provider. She also completed a six
month certificate
in early childhood development and obtained a
learner’s licence.
[17]
After the accident, she did not sit at home
and feel sorry for herself but she again went out into the open
labour market in an
attempt to make ends meet, but is, as a result of
the injuries she sustained in the accident, not able to secure
permanent employment.
The resultant consequence of allowing a higher
contingency deduction for pre-morbid future loss of earnings is that
she will get
a lower award for damages for loss of earnings. That
means that the court a quo had very little regard to her potential
earning
capacity, had the accident not happened. This court must thus
interfere with the trial court’s estimate, and the pre-morbid
contingency deduction pertaining to future loss of earnings is
consequently reduced to 10 per cent.
[18]
It is not necessary to correct the
mathematical error made by the trial court as the award will be
calculated on the basis of this
order as agreed between the parties.
[19]
In the result I make the following order:
1.
The appeal is upheld with costs, including costs consequent upon the
employment of two counsel.
2. The order of the
court a quo is set aside and in its stead is substituted:
‘
(a)
The pre-morbid contingency to be deducted for future loss of earnings
is 10 per cent.
(b)
The defendant is ordered to pay the plaintiff’s costs including
the costs of the plaintiff’s experts.’
Z
L L Tshiqi
Judge
of Appeal
APPEARANCES
For
Appellant: P J J De Jager SC (with him J P F De Klerk)
Instructed
by: Loubser Van Der Walt Attorneys, Pretoria
Kramer
Weihmann & Joubert Inc., Bloemfontein
For
Respondent: No appearance
[1]
The
judgment of the court a quo was handed down on 18 August 2014. This
means that the application for leave to appeal had to
be lodged with
the court a quo within one month, ie on or before 18 September 2014.
The application for condonation for the late
filing of the
application for leave to appeal was lodged with the court a quo on
20 October 2014, which was just over a month
out of the prescribed
time for lodging the application for leave to appeal.