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[2019] ZAGPJHC 344
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PZ v Road Accident Fund (18/5807) [2019] ZAGPJHC 344 (18 June 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: 18/5807
In
the matter between
Z,
P Plaintiff
and
ROAD
ACCIDENT
FUND Defendant
JUDGMENT
DOSIO AJ:
INTRODUCTION
[1]
This is an action for damages sustained by P Z (“the
plaintiff”), against the Road Accident Fund (“RAF”),
resulting from an accident that occurred on the 28
th
of June 2017.
[2] The merits were settled and the
defendant offered merits 80% in favour of the plaintiff and same was
accepted. So too was the
issue of general damages settled at an
amount of R400 000 subject to an apportionment of 80% in favour of
the plaintiff.
[3]
The defendant offered an undertaking for future medical treatment
relating to the injuries sustained in the motor vehicle collision,
limited to 80%.
[4]
There are joint minutes by the occupational therapists and industrial
psychologists.
Both the plaintiff and the
defendant obtained actuarial calculations.
[5]
The plaintiff obtained an educational psychologist’s report,
however the defendant did
not. The
defendant’s counsel stated that the RAF did not give an
instruction to appoint
an educational
psychologist. The remainder of the plaintiff’s reports remain
uncontested.
[6]
The defendant’s counsel argued that the defendant does not
agree with the contents of the report of Ms Mattheus (the educational
psychologist), where it states that the plaintiff would have
completed his N4-N6 level qualification. Counsel argued that the
plaintiff was unable to complete modules for his N2 and N3
qualification and this will not change post the accident. The
defendant’s
counsel contends that Ms Mattheus’s opinion
influenced the industrial psychologists to make their findings.
[7]
The defendant’s counsel argued that I should disregard the
contents of paragraph 2.12 of the industrial psychologist’s
joint minute which states that “
We
agree should the opinion of Ms Mattheus be accepted, and should Mr Z
have had the opportunity to obtain an NQF level 6 qualification
(it
is however impossible to predict exactly when this may have
occurred), Mr Z would have been eligible to secure employment at
around the Paterson B2/B3 level. (Basic only).”
[8]
It is within this context that I am to decide the issue of past and
future loss of income.
[9] The defendant’s actuarial
calculation makes provision for two scenarios. The defendant’s
counsel has requested that
I consider the first scenario. The
plaintiff’s counsel, however, has requested me to disregard the
first scenario, as there
is no basis upon which the defendant’s
actuary based it’s calculation.
BACKGROUND
[10] The plaintiff was born on […]
June 1982. He is accordingly 37 years of age. He was 35
years of age at the
time of the accident. In 2009 to 2011, he
enrolled to complete his N2 and N3 Engineering studies. He passed
four of his N2 modules
and four of his N3 modules. In August 2016, he
re-enrolled in his N2 Engineering studies on a part-time basis but
passed only one
of his two modules.
QUANTUM
[11]
As a result of the accident, the plaintiff sustained a left wrist
trans radial styloid perilunate dislocation, considered to
be severe
by Dr. Scher, (the plaintiff’s appointed orthopaedic surgeon).
As a result of his injuries the plaintiff underwent
open reduction
and k-wire stabilization, which were later removed. The plaintiff
still suffers from a stiff left wrist, moderate
left wrist functional
and symptomatic impairment, and secondary degenerative changes of the
lunate and intercarpal joints. According
to Dr. Ramogale, (an
independent medical examiner), the plaintiff suffers loss of
sensation of the left thumb and index finger
which has resulted in
episodes of burning himself. His grip strength is weak, preventing
him from any weight lifting. In summary
he has no left hand function.
The plaintiff’s neuropsychologist, Ms Talitha da Costa,
diagnosed the patient as suffering
from severe depression, extreme
anxiety / panic and physical pain. Prior to the accident the
plaintiff was active, enjoying his
gym. He was sociable, patient and
friendly. Post-accident he is short tempered, frustrated, and
self-conscious about his injured
hand. He worries and lacks energy
and motivation. The severe pain he is experiencing has reduced
attention ability.
[12]
The plaintiff’s educational psychologist, Ms Mattheus, recorded
that the plaintiff obtained his matric in 2001 and obtained
a N3
qualification in 2011. During 2016 to 2018 he obtained a learnership
at Ekurhuleni Municipality, where he worked as an electrical
assistant. Ms Mattheus opines that but for the accident, the
plaintiff would have been able to complete his N4-N6 (NQF level 6)
in
electrical engineering. As a result of his accident he would most
probably remain on NQF level 4. In the joint minute of the
occupational therapists at paragraph 3.5, the experts agreed that
based on Ms Mattheus’s findings, the plaintiff’s
difficulties would have rendered him a vulnerable person and he would
not be an equal competitor in the open labour market. Ms
Mattheus
opines that due to the sequelae of his physical injuries the
plaintiff would be excluded from working in the field of
electrical
engineering.
[13] The occupational therapists, Ms
Fletcher and Mr. Makhoba opine that as a result of his injuries the
plaintiff is now unsuited
to return to any of the previous
occupations he has held in the past as he does not meet the physical
demands for the occupations.
The previous occupations consisted of
working as an electrician, a fitter assistant, a crane operator and a
fire fighter. The
plaintiff will be confined to consider
sedentary occupations which are mostly administrative.
The plaintiff has been
unemployed since May 2018.
Loss
of earnings
[14]
In the joint minute of the industrial psychologists, Ms Leibowitz and
Tshepo Kalanko, agree that but for the accident the plaintiff
would
probably have had the opportunity to obtain an NQF level 6
qualification, even if it is impossible to predict exactly when
this
may have occurred. As a result, the plaintiff would have been
eligible to secure employment at around the Paterson B2/ B3
basic
level. Ms Leibowitz opined that the plaintiff would have reached his
career ceiling by the age of between 50-55, where he
may have been
earning in line with the Paterson C3/C4 levels. Thereafter only
inflationary increases would have applied until retirement
age of
65.
[15] Having regard to the accident the
plaintiff earned R2000 per month during his learnership contract
which ended at the end of
April 2018 and he has remained unemployed
to date. He will not meet his pre-accident potential, but may secure
employment at the
Paterson A3 level with possible progression to the
Paterson B1/B2 levels.
THE LAW
Contingencies
[16]
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).
[17]
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.
[18]
Over time, our courts have accepted that the extent of the period
over which a plaintiff’s income has 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.
Goodall
v President Insurance Co Ltd
1978 (1)
SA 389
(W)392H – 393G.
[19]
Based on the decision in
Goodall
supra
,
Koch
[1]
argues that as a general guideline, a sliding scale of 0.5% per year
over which the applicable income has to be calculated, can
be
applied.
[20]
The basic guideline of a deduction of 0.5% per year for every year
over which the income has to be determined was considered
by the
Supreme Court of Appeal in
Road
Accident Fund v Guedes
[2]
.
Zulman JA considered the argument of Koch pursuant to the Goodall
decision and found that the court
a
quo
had erred in incorrectly applying Koch’s sliding scale. The
Supreme Court of Appeal’s application of contingencies
was
furthermore in line with Koch’s sliding scale. It is not
evident from the judgment what the age of the plaintiff in casu
was
at the time of the trial, but the plaintiff was 22 years of age at
the time of the accident and 28 years at the time of the
appeal and
therefore probably approximately 25 years at the time of the trial,
leaving 40 years up to retirement. The court decided
on a deduction
of 20%.
[21] In the case of
Road Accident
Fund v Guedes
2006 (5) SA 583
(SCA) at paragraph [9] the court
referred with approval to
The Quantum Yearbook
, by R Koch
under the heading 'General contingencies', where it states that
when:
“
[in]
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. . . .” [my
emphasis]
[22]
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).
[23] 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.”
[24] 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 116G-H).
SUBMISSIONS
MADE BY THE PLAINTIFF
Pre-morbid contingencies
[25] The plaintiff’s counsel
contended that normally 0.5% per annum be applied for the remainder
of the plaintiff’s
working life of 30 years since the accident.
This will amount to 15%. It was contended that a slightly higher
contingency be applied
due to the uncertainty whether the plaintiff
would have obtained a NQF level 6 qualification in his uninjured
state. However, on
the other hand, plaintiff’s counsel
contended that the dedicated career and educational characteristics
of the plaintiff
pre-morbid, which were reflected in his continuous
efforts to better educate himself, all militates against a much
higher contingency
deduction. Accordingly it was argued that these
particular aspects of the life of the plaintiff merits a
consideration of positive
contingencies.
Post-morbid Contingencies
[26] As positive an influence as the
plaintiff’s pre-morbid attributes has on the application of
contingencies, the exact
opposite is true of his attributes and
circumstances in the post-morbid scenario. The plaintiff’s
position is extremely vulnerable,
exacerbated by his post-morbid
emotional condition. His mental status may prevent him from
performing his job to the best of his
abilities. Prior to the
accident the plaintiff had vast experience in doing medium to heavy
work. He has no experience in sedentary
administrative work.
Post-morbidly, sedentary administrative work seems to be the only
work he is suited for.
DEFENDANT’S SUBMISSIONS
[27]
The defendant’s counsel contended that Mr Molapo, who was the
supervisor of the plaintiff during the period of internship
and who
also observed the plaintiff’s quality of work after the
accident, found that the plaintiff was coping with his work.
Counsel
contended that due to the fact that the plaintiff is able to cope
with his work, he has prospects of securing future employment.
[28] Counsel contended further that
due to the fact that the defendant’s occupational therapist
indicated that he can do sedentary
work, this proves that he did not
suffer a total loss of earnings. Counsel requested me to use the
actuarial calculations of the
defendant with specific reference to
scenario one, and that in the event that I decide to use the
actuarial calculations of the
plaintiff, that higher contingencies
should be applied on past loss of earnings and future loss of
earnings.
EVALUATION
[29]
Post-morbidly, the plaintiff is a changed individual. He is presently
unemployed. He is sad, feels hopeless, can’t get
pleasure out
of the things he used to enjoy, has lost confidence, suffers from
severe depression, extreme anxiety/panic and physical
pain. The
industrial psychologists agree that the plaintiff is more vulnerable
and he would not be an equal competitor in the open
market. From the
joint minute of the occupational therapists he is unsuited to return
to work in any of the previous occupations
that he has had in the
past and for which he has experience or training. This will affect
his employability as he will be competing
against similarly qualified
individuals in the open labour market. He has no experience or
training in sedentary occupations and
furthermore such sedentary
occupation would have to be completed using one hand and this would
significantly reduce his employment
opportunities in the labour
market.
[30]
Even though the educational psychologist stated that it would be
unknown when the plaintiff would have completed his N4-N6
level
qualifications, Ms Mattheus is still convinced that he would have
been able to achieve this.
[31]
The defendant’s counsel, as previously stated
supra
,
contends it is improbable that the plaintiff would ever have
completed NQF level 6.
[32]
It was crucial for the defendant to have obtained their own
educational psychologist report to counteract what was stated by
Ms
Mattheus. In the absence of any report disputing the findings of Ms
Mattheus, I accept that it is probable, notwithstanding
the previous
failed attempts, to secure the necessary modules to proceed to N4 and
to obtain and NQF level 6.
[33] The
defendant obtained a calculation from their own actuary, which is
called Rosewood Technologies. This actuarial report is
based on the
joint minute of the industrial psychologists. Scenario one, which
relies on the supposition that the plaintiff would
never obtain a NQF
level 6 calculation, is however not based on the joint minute between
the experts. I accordingly find no reason
to rely on such
calculations alluded to in scenario one and they are disregarded.
Pre-morbid contingencies
[34] I accordingly find that but for
the accident, the plaintiff would have, (notwithstanding when this
would have occurred), have
progressed on his career path, as foreseen
by the industrial psychologists. Bearing in mind the personal
circumstances and work
record of the plaintiff, there is accordingly
no basis for drastically deviating upwards from the general guideline
utilised in
the
Goodall
decision supra and ostensibly
supported by the Supreme Court of Appeal in the case of
Guedes
supra.
I accordingly find that a 20% contingency should be
applied in the pre-morbid scenario.
Post-morbid contingencies
[35]
Although the plaintiff will be confined to sedentary occupation, he
will have to complete his work using one hand. This will
significantly reduce his employment opportunities. It stands to
reason that in the current world wide economical slump, commercial
realities will outweigh sympathies and accordingly plaintiff is under
a real threat of losing his employment and probably remain
unemployed.
[36]
I accordingly find that a contingency deduction of no less that 30%
should apply in respect of the plaintiff’s income
projection,
having regard to the accident.
[37]
Based on the calculation performed by the plaintiff’s actuary,
the past loss of income in the pre- and post-morbid scenarios
are the
same (i.e. R19 190). In respect of future income, but for the
accident, the plaintiff would have earned R5 436 544 and
now that the
accident had occurred he will only earn R2 748 959.
[38] After an application of a 5%
contingency in respect of past loss and a 20% contingency on the
future loss in the pre-morbid
scenario, the loss amounts to:
.
a. Past loss
R19 190
b.Future Loss
R4 349 235
(Total)
R4 368 425)
[39] After an application of a 5% past
loss and 30% future loss contingency in the post-morbid scenario the
loss amounts to :
a.
Past loss R19 190
b.
Future Loss R1 924 271
(Total)
R1 943 461)
The
difference between the pre- and post-morbid scenarios is accordingly
R2 426 964.00.
[40]
Although I have disregarded the defendant’s actuarial
calculation in respect to scenario one, I have still considered
the
actuarial calculation in respect to scenario two and compared it to
the calculations compiled by the plaintiff’s actuary.
[41]
The defendant’s calculations in respect to past loss, remains
the same in the pre- and post-morbid scenarios, namely
R121 869
versus R19 190 as per the plaintiff’s calculation. In respect
of future income, but for the accident, the plaintiff
would have
earned R5 922 980 versus R5 436 544 as per the plaintiff’s
calculation. Now that the accident has occurred, the
plaintiff will
only earn R2 900 749 versus R2 748 959 as per the plaintiff’s
calculation.
[42]
In applying the exact same contingencies, namely, 5%, 20% and 30%
respectively, (as applied in the plaintiff’s actuarial
report),
to the defendant’s figures, the amounts would total the
following:
past loss amounts
to R115 775.55 (R121 869 – 5%).
But for the
accident plaintiff would have earned R4 738 384 (R5 922 980 -20%).
Having regard to
the accident plaintiff will now only earn R2 030 524 (R2 900 749
-30%). Accordingly the difference in future income
is R2 707 860 plus
past loss of R115 775.55 which amounts to a total loss of income of
R2 823 635.55 based on the defendant’s
calculation versus R2
426 964 as per the plaintiff’s calculation.
[43] I accordingly find that the
average of R2 823 635.55 and R2 426 964, which
amounts to R2 625 299.78 is
fair and reasonable compensation for the
plaintiff in respect of loss of income.
ORDER
[44] In the premises the following
order is made;
1. The defendant is
ordered to pay a capital amount of R400 000 (FOUR HUNDRED THOUSAND
RAND) in respect of the plaintiff’s
claim for general damages
and an amount of R2 625 299.78 (two million six hundred and
twenty five thousand two hundred
and ninety nine rands and seventy
eight cents) in respect of the plaintiff’s claim for loss of
earnings. Payment shall be
made into the trust account of the
plaintiff’s attorneys on or before 31
st
of July 2019, details as follows:-
Mokoduo Erasmus
Davidson Attorneys Trust Account
First National
Bank, Rosebank Branch
Account Number: […]
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 him arising out of the injuries sustained by him in the
motor vehicle collision of 28 June 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 10 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, Burger Radiologists, Dr
Ramagole, T da Costa, A Mattheus, 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.
_______________________
D DOSIO
ACTING JUDGE OF THE HIGH COURT
Appearances
:
On behalf of the
Plaintiff Adv.
AM van der Merwe
Instructed
by: MED
Attorney
On behalf of the
Defendant Adv.
KH Muswobi
Instructed
by: Twala
Attorney
Heard on 5
th
May 2019
Judgment handed down on 18
th
June 2019
[1]
Robert J
Koch, The Quantum Yearbook, 2009, p 100
[2]
2006 (5) SA
583
(SCA) paras 9-10, 587H-588F, para 17, 590 H-591A.