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[2015] ZAGPJHC 172
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Oosthuizen v Road Accident Fund (2014/04972) [2015] ZAGPJHC 172 (15 July 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
JOHANNESBURG)
CASE NO: 2014/04972
DATE: 15 JULY 2015
In the matter between:
OOSTHUIZEN WILLEM
WOUTER
.......................................................................................
Plaintiff
And
ROAD ACCIDENT
FUND
......................................................................................................
Defendant
J U D G M E N T
WENTZEL AJ:
1. This is a claim for future loss of
earnings and earning capacity against the Road Accident Fund as a
result of injuries sustained
by the plaintiff in a road accident that
occurred on 24 May 2012.
2. The merits were conceded and all the
plaintiff’s other heads of damages were settled. The
plaintiff’s injuries were
admitted. These are detailed in the
orthopaedic surgeon, Dr. Read’s, the neurosurgeon, Dr. Marus’
and the neuropsychologist,
Mr. Ormond-Brown’s reports as
follows:
2.1. Skull lacerations
2.2. Degloving injury to his right hand
with traumatic amputation of his finger of the 4th digit, partial
amputation of the second
digit and a fracture of the third digit of
his right hand, which was his dominant hand.
2.3. Mild traumatic brain injury with
signs of mild brain dysfunction in the form of short term memory
loss.
3. The latter mild brain injury was
only detected when the plaintiff was assessed by the
neuropsychologist, which prompted the industrial
psychologist, Mr. De
Vlamingh, to prepare an addendum to his report and revise his
assessment of the plaintiff’s loss of
earnings.
4. No evidence was led by either party
and, save for the report of the industrial psychologist in relation
to future loss of earnings,
the plaintiff’s expert reports
were admitted, but not the truth of the facts reported to the experts
by the plaintiff.
However, Mr. Adams, who appeared for the defendant,
proceeded on the basis that even if the facts reported were true, on
the plaintiff’s
own version, he had not in fact, and would not
in future, suffer a loss of earnings or earning capacity.
5. Ms. Letzler, who appeared for the
plaintiff, relied upon the higher post morbid contingencies
recommended be applied by the industrial
psychologist, Mr. de
Vlamingh in the addendum to his report .She urged me to bear in mind
that contingencies were applied not only
where a loss of earnings was
a probability, but merely if they were a possibility. In this respect
she referred me to the matters
of Erdmann v SANTAM Insurance Co Ltd
1985 3 SA 402
(C) 404-405 and Burns v National Employers General
Insurance Co Ltd
1988 3 SA 355
(C) 365.
6. The industrial psychologist had
initially concluded in his report that :
“Before the accident, Mr.
Oosthuizen was physically fully able to fulfill all the typing and
writing requirements needed for
a successful professional career in
the legal world of work. He was able to succeed in private practice
and also within the corporate
sector with no restrictions to his
abilities. Following the accident, he is no longer able to use his
right hand for writing or
typing purposes and remains in this regard
according to Dr. Read considerably disabled with no chance of fully
regaining the use
of his right hand. However, he is fortunate to
have been employed by Nedbank in a senior managerial capacity, where
his disability
appears not to hamper his work performance or his
career and earnings prospects. He should therefore still be able to
achieve
his pre-morbid career and earnings potential as described in
paragraph 4.1.3 and may not suffer any loss of earnings as long as
he
retains his current employment at Nedbank.
However, if he should lose his current
employment for whatever reason and return to private practice, or
need to compete in the
open labour market, he will be at a distinct
disadvantage because of his right hand disability. He may struggle
to find alternative
employment in the corporate sector because of his
disability or if he decides to return to private practice he may need
a permanent
additional administration support person to assist him
with typing and note taking.
The writer is therefore of the opinion
that the Court should consider applying a moderately higher
post-morbid contingency deduction
as compensation for the risk of
future loss of earnings, given Mr. Oosthuizen’s vulnerability
outside of his present accommodating
employment at Nedbank. Mr.
Oosthuizen’s current management is very accommodating and
appreciative of his abilities despite
his disability, but the writer
has often noted how a change in management can negatively affect a
vulnerable employee like Mr.
Oosthuizen.
Dr. Read also states that Mr.
Oosthuizen’s “will require a total of eight to twelve
weeks off work to attend to the
treatment recommended in the body of
this report”. The writer is of the opinion that although Mr.
Oosthuizen’s employer
will in all probability provide paid sick
leave, he may have exhausted his sick leave and is likely to suffer a
loss of earnings
if he is unable to work for such a lengthy period of
time. Normal sick leave allocation is 30 days per 3 year cycle.”
7. However, after having sight of the
neuropsychologist’s report, this was revised in an addendum
dated 14 May 2015 as follows:
“Mr. Roper found through his
assessments that Mr. Oosthuizen has developed short-term memory
problems post-accident as he
has become very forgetful. According to
the Mr. Oosthuizen he has experienced difficulties remembering mutual
decision which were
made with colleagues and struggles to recall
previous discussions. Upon being appointed to the position of Head
of the Legal Services
within the Health division, he struggled to
absorb the necessary information and ultimately took longer than
expected to “get
up to speed with the new position”. Mr.
Roper confirms that these memory problems are consistent with those
identified on
the various tests. He concludes by adding that
although these difficulties may be stable, they could impose a
ceiling on further
advancements in the workplace and that his chances
of promotion have been reduced by the sustained brain injury.
In the writer’s original report
it noted that although Mr. Oosthuizen has clearly been negatively
affected by the permanent
physical damage to his right hand, it is
postulated that he will still achieve his pre-morbid career and
earnings potential and
may not suffer any loss of earnings should be
retain his current employment at Nedbank. The writer however
highlighted the possible
scenario that should Mr. Oosthuizen lose his
currently employment for whatever reason and return to private
practice or need to
compete in the open labour market, he will be at
a distinct disadvantage because of right had disability.
The writer accepts the new medical
information at hand and is of the opinion that it serves to
corroborate and further strengthens
the writer’s conclusion as
outlined in his original report. Mr. Oosthuizen’s subtle short
term memory problems will
add to his vulnerability in the open labour
market should he lose his employment for any reason in the future.
In addition, this
may lead to difficulties in his current position
and certainly increase the risk of poor performance assessments and
perhaps even
termination of service.
The writer is therefore now of the
opinion that his risk of losing his employment at Nedbank is bigger
than expected and that a
significantly higher post-morbid contingency
deduction should be applied considering his diagnosed physical and
cognitive vulnerability.”
8. This was on the basis of the
findings of the neuropsychologist that:
“He has developed a memory
problem post-accident. His long-term memory for events and facts
learnt before the accident is
still intact but his short-term memory
is compromised and he has become very forgetful. In the workplace he
forgets mutual decisions
that have been made. Later he will have no
recall of a discussion that he has had with colleagues. He moved
into a different
department after the accident and he took much
longer than expected to master the large volume of information that
he was expected
to remember. He noted that he is able to rely on old
memories to a significant degree in his new position.
He was off work for four weeks after
the accident while he convalesced. On his return to work he
struggled to cope because of his
injured right hand. After some
months he decided that he needed to change and he applied for, and
was appointed into, the position
of Head: Legal Services in the
Wealth Division. This was a horizontal move in the hierarchy at the
bank.”
9. On this basis, it was argued that
the plaintiff’s memory problems, which resulted in him
forgetting to execute instructions,
reduced his productivity and
efficiency. Despite the difficulties being admittedly subtle, it was
argued that they are likely to
impose a ceiling on further
advancement in the workplace and that his chances of promotion had
been reduced by the brain injury.
It was argued further, that his
hand injury had negatively impacted on the plaintiff’s
productivity.
10. It was argued that, in lieu of loss
of earning capacity, the Court should apply a contingency
differential of 20% to the plaintiff’s
actuarially calculated
earnings premised on a reduced premorbid deduction of 5 %, as opposed
to 10%, according to the formula prescribed
in Goodall v President
Insurance Company Limited 1978(1) SA 389 because the plaintiff’s
employment was stable, but a higher
post morbid deduction of 25 % as
opposed to the 15% deduction which had been recommended prior to
knowledge of the plaintiff’s
brain injury.
11. This was in fact higher than the
amount claimed as per the actuarial report of Munro Forensic
Actuaries tendered where calculations
were based upon a 15%
differential giving a loss of earnings claim of R2 710 145
12. Mr. Adams challenged these findings
on the following basis:
12.1. Firstly, at the time of the
accident, the plaintiff had established himself at Nedbank, where he
was employed as the Head
of Legal: Business Banking earning a salary
of approximately R 1 050 000 per annum. The company was loyal to him
and there was
little risk of his losing his employment with Nedbank
as a result of the injuries suffered by him.
12.2. Second, the plaintiff had not
suffered any loss as a result of his injuries and was actually
promoted in March 2014 after
the accident to Head of Legal: Wealth
and his salary increased to approximately R 1 400 000 per annum in
which capacity he has
continued to function .
12.3. Third, on the plaintiff’s
own version, he has not suffered a loss. In this respect, reliance
was placed on his industrial
psychologist, David de Vlamingh’s
report dated 22 April 2015. In particular reference was made to the
following statements
in the report :
12.3.1.“Mr. Oosthuizen’s
work history is comprised of sedentary type, professional legal work
mainly in the Financial
Sector. Prior to the accident, Mr.
Oosthuizen was employed as the Head of Legal for Business Banking for
approximately four and
a half years. He mentions that in this
capacity his duties included inter alia being responsible for the
legal risk in the business
banking division, whilst managing all
company lawyers nationwide”.
12.3.2 “Mr. Oosthuizen states
that he enjoyed his work and was looking to further his career in his
field in the foreseeable
future. Following the accident, Mr.
Oosthuizen convalesced for approximately one month before returning
to his pre-morbid capacity
in July 2012. Mr. Oosthuizen has since
been promoted to the Head of Legal for Nedbank’s Wealth
division in March 2014, a
capacity he continues to function in to
date”.
12.3.2. “Mr. Gavin Payne,
previous Head of Risk for the business Banking unit within Nedbank,
states that Mr. Oosthuizen was
a good performer who excelled in his
role and responsibilities. Mr. Payne notes that he was a focused,
driven employee who was
an expert in his field. He further mentions
that since being involved in the accident Mr. Oosthuizen has been
promoted to his
current position despite the injuries he suffered.
He concluded by adding that Mr. Oosthuizen’s future promotional
opportunities
would not be affected by the injuries he sustained”.
12.3.3. “Mr Bertus Janse Van
Rensburg, Head of Risk for Wealth within Nedbank, states that Mr.
Oosthuizen is a fantastic employee
whose “performance has not
slowed down in the slightest” since being involved in the
accident. Mr. Janse Van Rensburg
mentions that he personally
promoted Mr. Oosthuizen after the accident as his pre- and
post-accident work performance was of an
excellent standard. He
confirmed that Mr. Oosthuizen was not in any danger of losing his
employment due to the nature of the injuries.
Mr. Janse Van Rensburg
echoed Mr. Payne’s sentiment that Mr. Oosthuizen’s future
promotional prospects would not be
hindered by the injuries he
sustained in the accident.”
12.4. Finally, the occupational
therapist Ms. J Baker stated with regard to his residual work
capacity:
“The client’s reported
vocational history indicates that his most recent occupations are
within occupations involving
his skill in law and may be considered
skilled occupations and of a sedentary physical demand level. At the
time of the accident,
the client was working as a Legal advisor for
Nedbank. The description of his work as obtained from the Dictionary
of Occupational
Titles (DOT), confirms the rating of his work at a
sedentary physical demand level.
The client demonstrated the ability to
fully meet the sedentary, light, medium and aspects of the heavy
physical demand work up
to 24.3kg. The client demonstrated that he
has the physical reserves to perform work as a Legal advisor, albeit
his right hand
limitations. He has adopted adapted methods for
writing and typing. He has good sitting and standing tolerance.
From the client’s demonstrated
ability and findings from the specialist reports, I am of the opinion
that the client demonstrated
the ability to continue performing work
as a Legal advisor. Due to the level of his education and expertise
he has been stationed
in a managerial position where he has access to
resources and can make provision for accommodations that enable him
to continue
working. The accommodations he has implemented for
himself, allow him to perform his work tasks, despite his residual
right hand
pain and limitations.”
13. In the circumstances, Mr. Adams
argued that there was no loss of earnings as a result of the
plaintiff’s memory loss and
at best, he suffered a loss of
productivity due to the injury to his right hand which would result
in a differential of no more
than 3 %.
14. Matters which cannot otherwise be
provided for or cannot be calculated exactly, but which may impact
upon the damages claimed,
are considered to be contingencies, and are
usually provided for by deducting a stated percentage of the amount
or specific claims.
(De Jongh v Gunter 1975(4) SA 78 (W) 80F).
15. Contingencies include any possible
relevant future event which might cause damage or a part thereof or
which may otherwise influence
the extent of the plaintiff’s
damage. (Erdmann v SANTAM Insurance Co Ltd
1985 3 SA 402
(C)
404-405; Burns v National Employers General Insurance Co Ltd
1988 3
SA 355
(C) 365).
16. In a wide sense contingencies are
described as “the hazards that normally beset the lives and
circumstances of ordinary
people”. (AA Mutual Insurance
Association Ltd v Van Jaarsveld
1974 4 SA 729
(A); Van der Plaats v
SA Mutual Fire & General Insurance Co Ltd
1980 3 SA 105
(A);
Southern Insurance Association Ltd v Bailey
1984 1 SA 98
(A) 117).
Contingencies have also been described as “unforeseen
circumstances of life”. (De Jongh v Gunther
1975 (4) SA 78
(W)
80F).
17. The percentage of the contingency
deduction depends upon a number of factors and ranges between 5% and
50%, depending upon the
facts of the case. (AA Mutual Association
Ltd v Maqula 1978(1) SA 805 (A) 812; De Jongh v Gunther 1975(4) SA 78
(W) 81, 83, 84D;
Goodall v President 1978(1) SA 389 (W) 393; Van der
Plaats v SA Mutual Fire & General Insurance Co Ltd 1980(3) SA
105(A) 114-115A-D).
18. Contingencies are usually taken
into account over a particular period of time, generally until the
retirement age of the plaintiff
(Goodal v President Insurance Co Ltd
1978 1 SA 389
(W) 393; Rij NO v Employers’ Liability Assurance
1964 (4) SA 737
(W); Sigournay v Gillbanks
1960 2 SA 552
(A) 569;
Smith v SA Eagle Insurance Co Ltd
1986 2 SA 314
(SE) 319).
19. Often, what is described as a
“sliding scale” is used, under which it is allocated a
“1/2% for year to retirement
age, i.e 25% for a child, 20% for
a youth and 10% in middle age”. (Goodall v President Insurance
Company Limited 1978(1)
SA 398(W) and Road Accident Fund v Guedes
2006(5) SA 583(A) 588D-C. Likewise, see Nonwali v Road Accident Fund
(771/2004) [2009]
ZAECMHC 5 (21 May 2009) (para 23))
20. Colman J provided a useful
exposition Burger v Union National South British Insurance Co
1975
(4) SA 72
(W) 75 of the approach to be adopted by the Court:
“A related aspect of the
technique of assessing damages is this one; it is recognized as
proper, in an appropriate case, to
have regard to relevant events
which may occur, or relevant conditions which may arise in the
future. Even when it cannot be said
on a preponderance of
probability that they will occur or arise, justice may require that
what is called a contingency allowance
be made for a possibility of
that kind. If, for example, there is acceptable evidence that there
is a 30 percent change that an
injury to the leg will lead to
amputation, that possibility is not ignored because 30 percent is
less than 50 percent and there
is therefore no proved preponderance
of probability that there will be an amputation. The contingency is
allowed for by including
in the damages a figure representing a
percentage of that which would have been included if amputation had
been a certainty. That
is not a very satisfactory way of dealing
with such difficulties, but no better way exists under our
procedure.”
21. But the difficulty with this
approach was appreciated by Margo J in Goodwill v President Insurance
Co Ltd 1978(1) SA 389 W at
392H:
“In the assessment of a proper
allowance for contingencies, arbitrary considerations must inevitably
play a part, for the
art of science of foretelling the future, so
confidently practiced by ancient prophets and soothsayers, and by
modern authors of
a certain type of almanac, is not numbered among
the qualifications for judicial office”.
22. The advantage of applying actuarial
calculations to assist in this task was emphasised in the leading
case of Southern Insurance
Association Ltd v Bailey
1984 1 SA 98
(A)
113H-114E , where the Court stated :
“Any enquiry into damages for
loss of earning capacity is of its nature speculative
…..
All that the Court can do is to make an
estimate, which is often a very rough estimate, of the present value
of the loss. It has
open to it two possible approaches. One is for
the Judge to make a round estimate of an amount which seems to him to
be fair and
reasonable. That is entirely a matter of guesswork, a
blind plunge into the unknown. The other is to try to make an
assessment,
by way of mathematical calculations, on the basis of
assumptions resting on the evidence. The validity of this approach
depends
of course upon the soundness of the assumptions, and these
may vary from the strongly probable to the speculative. It is
manifest
that either approach involves guesswork to a greater or
lesser extent. But the Court cannot for this reason adopt a non
possumus
attitude and make no award.
……..
In a case where the Court has before it
material on which an actuarial calculation can usefully be made, I do
not think that the
first approach offers any advantage over the
second. On the contrary, while the result of an actuarial
computation may be no more
than an ‘informed guess’ it
has the advantage of an attempt to ascertain the value of what was
lost on a logical basis;
whereas the trial Judge’s ‘gut
feeling’ (to use the words of appellant’s counsel) as to
what is fair and
reasonable is nothing more than a blind guess.”
23. But the Court emphasised that
provision for contingencies falls squarely within the subjective
discretion of the court as to
what is reasonable and fair. This will
depend upon the underlying assumptions made which are not the domain
of the actuary. (Shield
Insurance Co Ltd v Hall
1976 4 SA 431
(A)
444; Pringle v Administrator, Tvl
1990 2 SA 379
(W) 397-398).
24. The Appellate Division has stressed
in Legal Insurance Company Ltd v Botes 1963(1) SA 608(A) 614F-G that:
“In assessing the compensation
the trial judge has a large discretion to award what under the
circumstances he considers right.
He may be guided but is certainly
not tied down by inexorable actuarial calculations”.
25. Bearing the approach of our courts
in mind, the Court is faced with attributing a percentage loss to
premorbid and post morbid
earnings.
26. In this respect guidance can be
found in the matter of Goodall v President Insurance
1978 1 SA 389W
where a 10% contingency was applied to compensate the plaintiff for
the fact that but for the accident, he would have been promoted.
27. It is, however, difficult for me to
apply such contingency differential in this matter when faced with
the objective evidence
to the contrary that since the accident, the
plaintiff was in fact promoted. The plaintiff insists that this was
a lateral change
in his position and did not constitute a promotion
but this flies in the face of the statement by Mr. Bertus Janse van
Rensburg,
Head of Risk for Wealth within Nedbank who says he
personally promoted the plaintiff. The objective fact is that his
injuries have
not precluded his being promoted.
28. However, the Court needs to be
mindful of the difficulties which the plaintiff states he experiences
both with regard to the
amputation of the fingers of his right hand
and his short term memory loss. These difficulties, although not
necessarily impinging
the plaintiff’s promotion prospects, may
well impinge upon his productivity and earning capacity.
29. This raises the difficulty alluded
to in the matter of [2011] ZAGPJHC 242 by Bizos AJ that such a claim
is best quantified under
general damages rather than under a claim
for loss of earnings. The further difficulty that arises in this
matter with such approach
is that general damages in the amount of R
400 000 has been agreed and settled and it is not clear whether the
Court would be empowered
to make an additional award under this head.
30. In addition, a percentage loss in
productivity does not necessarily translate into an equivalent
contingency spread. (Union
and National Insurance Co v Coetzee
1970(1) SA295; Redman v RAF 2003(2) SA @ [11] SCA.)
31. Bearing this in mind, I am inclined
to agree that the plaintiff has suffered a loss of productivity and
will need to make adaptions
for his short term memory loss and the
fact that he has lost fingers on his dominant hand. I think that a
loss of promotional prospects
are remote particularly as his
employers have stated that his performance has not slowed down in the
slightest since being involved
in the accident and that both his pre
and post accident performance was of an excellent standard and that
his promotional prospects
have not been hindered by the injuries
sustained by him in the accident. On the contrary, he has been
promoted despite his injuries
and shortcomings. I am, however,
mindful that in applying an appropriate contingency to the
plaintiff’s post-morbid earnings,
a loss of promotional
prospects need not be established as a probability, but merely as a
possibility.
32. Ms. Letzler wished me to discount
this evidence as it was unlikely that his employers, who were loyal
and accommodating, would
state otherwise. But I cannot accept that
this is the case. The managers interviewed by, who they must have
known, was an industrial
psychologist to support the plaintiff’s
case against the RAF, would have been equally motivated to highlight
any difficulties
they may have noted with the plaintiff’s post
accident performance. In addition, it was this very fact that the
plaintiff’s
employees were sympathetic to him and he was a long
term highly regarded employee that she sought to discount the usual
premorbid
contingencies applied to his earnings. The plaintiff cannot
have it both ways and thus the fact that the plaintiff’s
employment
was secure, would equally be applicable to the contingency
deduction for both his pre morbid and post morbid earnings and thus
there would be no differential arising herefrom.
33. However, I am mindful that there is
a remote chance that the plaintiff may not experience as sympathetic
and loyal employers
in the remote possibility that he were to lose
his position at Nedbank. I have no doubt, however, that the
plaintiff’s skills
and capabilities would hold him in good
stead with any future employer.
34. I am also mindful that Nugent JA
has warned Minister of Safety and Security v Seymour
2006 (6) SA 320
(SCA) where Nugent JA said the following:-
“The assessment of awards of
general damages with reference to awards made in previous cases is
fraught with difficulty. The
facts of a particular case need to be
looked at as a whole and few cases are directly comparable. They are
a useful guide to what
other Courts have considered to be appropriate
but they have no higher value than that....
The dangers of relying excessively on
earlier awards are well illustrated by comparing the award in [May v
Union Government
1954 (3) SA 120
(N)] to the award that was made in
Maphalala v Minister of Law and Order [unreported WLD of 10 February
1995] “.... Whether
the award in May was excessive, or the
award in Maphalala was niggardly, is beside the point. I use them
only to illustrate that
the gross disparity of the facts in each case
is not reflected in the respective awards, and neither is in those
circumstances
a safe guide to what is appropriate.”
35. Having regard to the aforegoing,
and because I am may not be empowered to increase the general damages
award which has been
settled, I believe that a reduced 5%
pre-morbid contingency be applied to take into account of the
plaintiff’s secure
work environment and a 20 % post-morbid
contingency be applied to cater for his loss of productivity which I
have equally reduced
by 5% as his employment prospects have in fact
remained secure . In the circumstances I find that a 10 %
differential be applied
to actuarially calculate the plaintiff’s
loss of earnings. This has been actuarially determined to be R 1
860 090. The
RAF amendment Act has capped the loss at R 1 822 600.
36. I accordingly make an Order as
follows:
36.1. That the defendant make payment
to the plaintiff in the amount of R 2 422 241,43 being in respect of
36.1.1. R 1 822 600 for loss of
earnings.
36.1.2. General damages in the settled
amount of R 400 000
36.1.3. Past medical expenses in the
settled amount of R 199 641.43
36.2. Interest on the aforesaid amount
at the legally prescribed rate from a date 14 days after the date of
judgment to date of
payment.
36.3. It is recorded that the defendant
undertakes in terms of section 17(4) of the RAF Act 56 of 1996 to
furnish the plaintiff
with 100% of the cost of any future
accommodation of the plaintiff in a hospital or nursing home as well
as the treatment of or
rendering of a service to him or supplying
goods due to injuries sustained in the collision and the sequlae
thereof after such
costs have been incurred and upon proof thereof.
36.4. That the defendant is ordered to
pay the plaintiff’s costs of suit including the qualifying fees
of the plaintiff’s
experts.
WENTZEL A J
ACTING JUDGE OF THE HIGH COURT
COUNSEL FOR PLAINTIFF: M LETZLER
INSTRUCTED BY: WIM KRYNAUW ATTORNEYS
011 333 7782
COUNSEL FOR DEFENDANT: L ADAMS
INSTRUCTED BY: LINDSAY, KELLER &
PARTNERS
011 880 8980
DATE OF HEARING: 19th MAY 2015
DATE OF JUDGMENT: 15 July 2015