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[2019] ZAGPJHC 390
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A M v Road Accident Fund (18/19420) [2019] ZAGPJHC 390 (24 May 2019)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER: 18/19420
In
the matter between
M,
A Plaintiff
and
ROAD
ACCIDENT
FUND Defendant
JUDGMENT
DOSIO AJ:
INTRODUCTION
[1]
This is an action for damages sustained by the plaintiff resulting
from an accident that occurred on the 8
th
of September 2017.
[2]
The parties settled the issue of merits 80/20 in the plaintiff’s
favour and general damages in the amount of R700 000.00
pre-apportionment.
[3]
The defendant offered an undertaking for future medical treatment
relating to the injuries sustained in the motor vehicle collision,
limited to 80%.
[4]
The only issue to be decided is the loss of income (past and future)
and the contingencies to be applied.
[5]
One witness was called for the plaintiff, namely the industrial
psychologist, Ms Lee Leibowitz (“Ms Leibowitz”)
and then
the plaintiff’s case was closed. The defendant called no
witnesses and closed its case.
[6]
The trial proceeded with the exclusion of the defendant’s
industrial psychologist’s report. The defendant had obtained
an
industrial psychologist’s report, but it was filed late. I was
accordingly only presented with the plaintiff’s actuarial
report, as the defendant did not compile one.
[7]
Joint minutes were compiled in respect to the reports of the
orthopaedic surgeons, the occupational therapists, and the clinical
psychologists.
[8] The parties agreed that the
summary of the medico-legal evidence, as compiled by the plaintiff’s
counsel, could be handed
up as a reflection of the injuries sustained
by the plaintiff and the sequelae.
Injuries
[9]
According to the plaintiff’s appointed orthopaedic surgeon, Dr.
Sher, the plaintiff sustained a closed head injury with
concussion
and a GCS score of 12/15 with a small left side subarachnoid
haemorrhage. The head injury was considered to be moderately
severe.
The plaintiff also sustained a fracture of the cervical spine at
level C2, which the experts considered to be moderately
severe.
According to the orthopaedic surgeon, the plaintiff would experience
on-going symptoms attributable to the cervical spine,
which may be
aggravated by physical or psychological stress. From an orthopaedic
point of view the C2 fracture stabilized satisfactorily,
leaving the
plaintiff with mild long-term impairment which could impact on her
productivity. According to the orthopaedic surgeon,
the plaintiff’s
working capability has probably been unaffected.
[10]
The plaintiff’s appointed neurologist, Dr. Townsend opined that
due to neurocognitive and neuropsychological sequelae
of the head
injury, the plaintiff’s employment has been negatively
affected. The plaintiff is fortunate that her husband
is able to help
her, as they are both estate agents. Dr Townsend’s opinion is
that the plaintiff is an extremely vulnerable
individual in the open
labour market as she sustained a moderate to severe primary diffuse
traumatic brain injury and sustained
a fracture of her C2 vertebra.
[11]
The parties’ appointed neuropsychologists agree in their joint
minute, that there is no
evidence
of any significant psychiatric condition, behavioural disorder or
significant
injury
prior to the accident under discussion. According to the plaintiff’s
schooling and
occupation,
she is considered to be of average intelligence pre-accident. It is
further agreed that
post-accident, based on objective information, performance results
and collateral
documentation, that the plaintiff’s traumatic head injury
resulted in long-term neuropsychological difficulties.
Tests done
further revealed some cognitive
difficulties
and a travel related anxiety, post-traumatic stress, depression and a
reduced
tolerance.
There is a decrease in her quality of life and her emotional,
physical and cognitive difficulties which have affected
her overall
functioning in personal, occupational and social spheres. Although
the plaintiff returned to her work as an estate
agent, post-accident,
she now does mostly administration tasks which she executes with
difficulty due to the cognitive difficulties.
The plaintiff is
limited in going to see clients and this has resulted in financial
loss. The plaintiff is to undergo thirty five
sessions
of psychotherapeutic intervention.
[12]
The defendant’s appointed neurosurgeon, Dr. Okoli, regards the
plaintiff’s brain injury
as
moderate, however the plaintiff has since developed a mood disorder,
low self
worth,
headaches, forgetfulness and probably has become more tense as she
grinds
her
teeth in her sleep. Dr Okali confirmed that the C2 fracture has
caused impaired
neck
mobility. He rated her whole person impairment as 32%.
[13]
The plaintiff’s occupational therapist, Sharilee Fletcher (“Ms
Fletcher”), opines that although the plaintiff
meets the
physical demands of her previous occupations which were sedentary in
nature, namely as an administrator, receptionist,
personal assistant
and manager, she will find it difficult to cope from a cognitive,
endurance and perceptual perspective. Her
mental endurance would
significantly limit her abilities to cope with a full eight (8) hour
day. She is fortunate to work with
her husband who is understanding
of her difficulties since the accident. It is unlikely that this
would be the case in the open
labour market.
[14]
The plaintiff’s appointed educational psychologist , Alet
Mattheus, recorded that pre-accident the plaintiff obtained
a matric
at Die Fakkel high school in 1989 and a N4
qualification at the Insurance
Institute of South-Africa in 2004. At the time of the accident she
was busy with her N4 in Real Estate.
She is currently awaiting her N4
Certificate. Pre-accident she would probably have been able to
complete her N4 in real estate
(NQF Level 4) and successfully
complete the professional designation exam which would have allowed
her to work independently as
an estate agent and to start her own
agency. Post-accident taking into consideration the severity of the
brain injury, the educational
assessment results, revealing
neurocognitive difficulties impacting on her overall functioning, the
plaintiff would probably no
longer be in a position to complete the
professional designation examinations of real estate and therefore
not be able to practice
independently.
The
evidence of the Industrial psychologist Lee Leibowitz
[15]
Ms Leibowitz testified that she interviewed the plaintiff on the 6
th
of March 2019, with
the
purpose of establishing her earnings at the time of the accident and
also to
consider
the impact of the plaintiff’s injuries on her past and future
loss of income.
[16]
This witness testified that at the time of the accident the plaintiff
worked as a sales
associate
for a real estate agency and held the status of an intern. This
witness was
able
to determine the plaintiff’s salary as she had access to an IRP
5 for the 2018 year
of
assessment, created prior to the plaintiff’s accident.
[17]
In the pre-accident scenario she postulated the plaintiff’s
income on two scenarios.
[18]
Scenario one, which this witness indicated was the more likely one,
the plaintiff would
remain
as an estate agent and would’ve continued working as a sales
associate
in
an intern position. Ms Leibowitz stated the plaintiff would have
become an estate
agent,
(as this is what the plaintiff told her she wanted to be) and also
based on the
educational
psychologist’s report who stated that the plaintiff could have
become an
estate
agent in the pre-morbid scenario.
[19]
In respect to the second scenario, based on the plaintiff’s
past experience, where she
worked
as a receptionist and secretary, if all else failed, she could go
back and do a
similar
job. Ms Leibowitz stated this was the less likely scenario as the
plaintiff had not
done
this type of work for many years and she enjoyed working as an estate
agent.
[20]
Ms Leibowitz testified that the plaintiff returned in February 2018
to work as a real
estate
sales associate where she still holds the position of an intern. The
plaintiff did
however
inform this witness that after the accident she has a fear of driving
and relies
on
her husband to take her to work related commitments. The plaintiff
informed her that
she
has difficulty remembering her clients and the properties which are
for sale and
that
she has lost momentum to keep going.
[21]
This witness stated that regarding the plaintiff’s earnings, it
was difficult to postulate,
however,
at the time of the accident which was on the 8
th
of September 2017, the plaintiff was earning a monthly average of
R32 065.00 per month. Post-accident (from March 2018 to
the 28
th
of February 2019), the plaintiff earned an average income over a 12
month period of only R6 066.78 This witness concluded
that in
light of all the opinions of the relevant experts, the plaintiff is
not functioning at her pre-accident levels and will
not be able to
achieve her pre-accident earnings. This witness stated that in her
opinion, if the plaintiff is unable to continue
with her current
occupational pursuits, and if her husband was not there to help her,
realistically speaking, she would have difficulty
finding other work.
THE LAW
Contingencies
[22]
To claim loss of earnings or earning capacity, a patient must prove
the physical
disabilities
resulting in the loss of earnings or earning capacity and also actual
patrimonial
loss.
Rudman
v Road Accident Fund
2003(SA 234) (SCA).
[23]
There must be proof that the disability gives rise to a patrimonial
loss, this in turn will
depend
on the occupation or nature of the work which the patient did before
the
accident,
or would probably have done if he had not been disabled.
Union
and National
Insurance
Co Limited v Coetzee
1970(1)
SA295 (A) AT 300A.
[24]
In the case of
Road
Accident Fund v Guedes
2006 (5) SA 583
(SCA) at Paragraph [9] at 587 to 588 the court
referred with approval to The Quantum Yearbook, by R Koch under the
heading 'General
contingencies', where it states that when:
“
assessing
damages for loss of earnings or support, it is usual for a deduction
to be made for general contingencies for which no
explicit allowance
has been made in the actuarial calculation. The deduction is the
prerogative of the Court. . . .”
[25]
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 Gunth
er
1975(4) SA 78 (W) 81, 83, 84D;
Goodall
v Preside
nt
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).
[26] 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.”
[27]
Where the method of actuarial computation is adopted, it does not
mean that the trial Judge is "tied down by inexorable
actuarial
calculations". He has "a large discretion to award what he
considers right". One of the elements in exercising
that
discretion is the making of a discount for "contingencies"
or the "vicissitudes of life". These include
such matters
as the possibility that the plaintiff may in the result have less
than a "normal" expectation of life; and
that he may
experience periods of unemployment by reason of incapacity due to
illness or accident, or to labour unrest or general
economic
conditions. The amount of any discount may vary, depending upon the
circumstances of the case. (see
Southern
Insurance Association Ltd supra
).
[28] Over time, our courts have
accepted that the extent of the period over which a plaintiff’s
income have to be established
has a direct influence on the extent to
which contingencies have to be accounted for. Put differently, the
longer period over which
unforeseen contingencies can have an
influence over the accuracy of the amount adjudged to be the probable
income of the plaintiff,
the higher the contingencies that have to be
applied.
1978 (1) SA 389
(W) 392H-393 G.
Goodall v President
Insurance Co Ltd
EVALUATION
[29]
I cannot find fault in the calculation of Ms Leibowitz regarding the
fact that she only
divided
the income from 1 March 2017 to 28 March 2018 by 7 months instead of
12, as
it
is clear that the plaintiff was off work for 5 months from the 8th of
September 2017 until February 2018. However, I do question
why Ms
Leibowitz never took into consideration previous IRP5’s
of the plaintiff. When she was asked by the defendant’s
counsel
why she didn’t comment on the previous IRP5”s she stated
“No reason”. The IRP5 for 2016 reflects
an income earned
of R43679.00. The IRP5 for 2017 reflects an income earned of
R86799.00. Ms Leibowitz stated that she used the
information of what
the plaintiff was earning at the time of the accident. Ms Leibowitz
referred to the income earned for the 2018
year of assessment which
amounts to R224 455.00. This is the highest of the three and is
the amount most favourable to the
plaintiff. During cross examination
she was asked by the defendant’s counsel if she knew whether
South Africa is going through
a recession and whether this may have
an effect on the sale of properties to which Ms Leibowitze stated she
was not a real estate
agent nor an
economist,
however she agreed that the market was depressed. She also agree that
the market
condition would have an effect on earnings and that this could affect
the
earnings
generated by estate agents.
Pre-morbid contingencies
[30]
From the learned Koch’s,
The
Quantum Yearbook
,
it is normal that 0.5% per annum
be
applied for the remainder of the plaintiff’s working life of 20
years since the accident.
This
will amount to 10%. However, it would not be unreasonable to apply a
slightly
higher
contingency due to the uncertainty of commission income in scenario
one. In
addition,
I bear in mind that Ms Leibowitz did not take an average of the
earnings of the
plaintiff
for the three years preceding the accident.
Post-morbid Contingencies
[31]
Post-morbidly the plaintiff is a changed individual, as is evident
from the summary of the expert reports. As per the joint
minutes of
the orthopaedic surgeons the cervical injury will probably leave the
plaintiff with mild long term impairment but her
working
capability has
probably been unaffected. As per the joint minutes of the
occupational therapists, the plaintiff would be able to
perform work
in the light and sedentary categories, but she would find it
challenging to compete in the open labour market. As
per the joint
minute of the clinical psychologists some cognitive difficulties
exist and the plaintiff presents with symptoms of
travel related
anxiety, post-traumatic stress, depression and reduced tolerance.
[32]
The plaintiff was born on the 8th of March 2017. She was 45 years of
age and healthy at the time of the accident. She is presently
47
years of age. She holds a grade 12 and she additionally completed an
N4 in insurance and at the time of the accident was in
the process of
completing an N4 in Real Estate.
[33]
She is presently employed at Remax, but is mostly doing
administrative work for her husband and herself. She is at risk
of remaining unemployed should she loose her current employment. She
is likely not to meet her pre-morbid educational goals of
qualifying
as an independent estate agent.
[34]
Considering the evidence of Ms Leibowitz I have considered scenario
one as being the more favourable scenario and have considered
the
plaintiff’s actuarial report based on the figures that Ms
Leibowitz had at her disposal. In the first scenario
the
actuary found that an amount of R1 955 002.00 was a
reasonable amount for the loss of earnings.
[35]
The 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.
[36]
Plaintiff’s counsel argued that a 10% in the pre-morbid
scenario would be reasonable because she has twenty years left
at
0.5% per annum. In the post-morbid scenario it was argued that a 40%
contingency would be appropriate because if she lost her
job she
would be unemployable.
[37]
As stated by the joint minutes of the plaintiff’s orthopaedic
surgeon, namely, Dr Scher and the defendant’s orthopaedic
surgeon, namely, Dr Sithebe, her working capability will probably be
unaffected. Taking into consideration the joint minute of
the
occupational therapists, namely Ms Fletcher and Mr Kukuu, it is
important to note that Mr Kukuu considered the clinical
psychologists comment that the plaintiff’s
“
neuropsychological
profile is expected to have an impact of significance on her
functioning in the formal work context, but it is
not expected to
prevent her from competing in the open labour market. In this regard,
her functioning in the work context is likely
to fluctuate, as her
neurocognitive deficits are significantly under the influence of her
chronic pain and psychological symptoms.
Should her pain levels be
adequately managed, and her psychological problems adequately
addressed, her performance at work may
likely improve and be more
consistent.”
[38]
I find that resulting from the fluctuations in the property market,
which may be
attributable
to the depressed market, that a higher contingency should be applied
pre-morbid than the 10% suggested by the plaintiff’s
counsel.
In addition, due to the fact
that
there are indications that the plaintiff after coming back to work is
coping better,
and
also due to the fact that the market is depressed and the plaintiff
has only sold
three
houses since her return to work, that a lower contingency should be
applied post-morbid than the 40% suggested by the plaintiff’s
counsel. I accordingly find
that
20% be applied pre-morbid and 30% post-morbid.
ORDER
1.
The
defendant is ordered to pay a capital amount of R560 000.00 (FIVE
HUNDRED AND SIXTY
THOUSAND RAND) in respect of general damages and a capital amount of
R707352.80 (SEVEN HUNDRED AND SEVEN THOUSAND
THREE HUNDRED AND FIFTY
TWO RANDS AND EIGHTY CENTS (post apportionment) in respect of the
plaintiff’s claim for loss of earnings.
Payment shall be made
into the trust account of the plaintiff’s attorneys, details as
follows:-
Mokoduo Erasmus
Davidson Attorneys Trust Account
First National
Bank, Rosebank Branch
Account Number:
62222488290
Branch Code:
253305.
2. The defendant is
ordered to furnish the plaintiff with an undertaking in terms of
section 17(4)(a)
of the
Road Accident Fund Act, 56 of 1996
, for the
costs of the future accommodation of the plaintiff, in a hospital or
nursing home or treatment of or rendering of a service
or supplying
of goods to her arising out of the injuries sustained by her in the
motor vehicle collision of 08 September 2017,
after such costs have
been incurred and upon proof thereof, limited to 80%.
3.
The defendant will
pay the agreed or taxed party and party High Court costs of the
action up to and including trial costs of 15
and 16 May 2019, such
costs to
include:-
3.1
the
costs attendant upon the obtaining of payment of the capital amount
referred to in paragraph 1 above;
3.2
all
reasonable travelling and accommodation costs of the plaintiff to
attend all medico-legal appointments of the Defendant and
to attend
at relevant consultations in preparation for trial and the trial
itself;
3.3
the
reasonable preparation, qualifying, reservation and travelling and
accommodation fees, if any of all the plaintiff’s experts.
Such
experts to include, but not limited to, Dr Scher, Dr Fourie (Burger
Radiologist), Dr Makua, Dr Ramagole, Dr Townsend,
A Mattheus, T
da Costa, S Fletcher, L Leibowitz, W Loots, if any as may be agreed
or allowed by the Taxing Master;
3.4
time
spent in the preparation of indexes and a minimum of 6 (six) copies
of said bundles; and
3.5
the
plaintiff’s attorneys shall serve the notice of taxation on the
defendant’s attorneys and shall allow the Defendant
14
(fourteen) court days within which to make payment of such costs.
3.6
The
plaintiff entered into a valid contingency fee agreement with her
attorney of record.
_______________________
D DOSIO
ACTING JUDGE OF THE HIGH COURT
Appearances
:
On behalf of the Plaintiff: Adv.
A.M. Van Der Merwe
Instructed
by: NED Attorneys
On behalf of the Defendant: Adv.M.R
Latib
Instructed
by: Tasneem Attorneys
Heard on 16
th
May 2019
Judgment handed down on 24
th
May 2019