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[2019] ZAGPJHC 334
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DP obo LD v Road Accident Fund (15/29274) [2019] ZAGPJHC 334 (6 September 2019)
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IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG LOCAL DIVISION,
JOHANNESBURG)
CASE
NO: 15/29274
In the matter
between:
D:
P OBO D
L
Plaintiff
and
ROAD
ACCIDENT
FUND
Defendant
J U D G M E N T
MILTZ AJ:
INTRODUCTION
1.
The
above matter was allocated to me for hearing on Thursday 8 August
2019. No witnesses were called. Counsel for the
parties
informed me that the only matters that required decision were the
amounts to be awarded for future loss of earnings and
for general
damages.
2.
I
was informed that the defendant had not provided its attorney with
instructions but that the parties’ counsel were in agreement
on
the critical issue concerning the future loss of earnings that will
be referred to below.
3.
I
was also referred to the judgment in BEE v RAF
2018 (4) SA 366
(SCA)
in which the Court held amongst other things that where experts in
the same field reach agreement unless the trial court
is dissatisfied
with the agreement and alerts the parties to the need to adduce
evidence on the agreed material the trial court
would be bound and
entitled at least to accept the matters agreed by the experts (at 386
A to D).
4.
I
was enjoined by counsel to consider the contents of the plaintiff’s
experts’ joint minute bundle which provided sufficient
agreement between the experts on the outstanding issues to enable me
to determine the quantum thereof.
FUTURE
LOSS OF EARNINGS
5.
In
the pre-trial minute of the meeting between the industrial
psychologists N. Kotze, J.F. Bush and B. Dodds it was agreed that
due
to the extent of the sequelae of the injuries sustained, especially
the neuro cognitive and neuro psychological difficulties,
and the
effect of same on L’s future employability as related in the
minute a substantially higher post-morbid contingency
deduction
should be applied. Relying on their agreement the correct
contingency to be applied to the post-morbid income should
be 35%.
6.
Having
considered the contents of the expert minutes after the hearing on 8
August 2019 I communicated with counsel for the parties
informing
them that I was unable to resolve the differences in opinion embodied
in the joint minute of the educational psychologists
Ms Scott and Ms
Mantsena. I informed them that the differences concern the
facts on which Ms Scott relied in opining that
L’s educational
ceiling was likely to be the NQF3 level and those on which Ms
Mantsena relies in opining that L is likely
to achieve the NQF4
level. I pointed out that the determination of the issue or
difference was central to the amount of the
award for future loss of
earnings.
7.
I
later received written responses from the defendant’s counsel
confirming that counsel were agreed that the NQF3 level would
be the
appropriate level on a post-morbid scenario. Therefore the
defendant submitted that there was no real dispute between
the
parties in regard to the difference of opinion between the
educational psychologists.
8.
However
the plaintiff’s counsel submitted a revised minute of the
educational psychologists in which Ms Scott and Ms Mantsena
agreed
that the likely post-morbid scenario should be determined on the
basis that L’s ceiling would be the NQF4 level.
No
reasons were given for Ms Scott’s change of opinion when
signing the revised minute.
9.
Affidavits
submitted with the Contingency Fee Agreement between the plaintiff
and her attorneys purported to comply with the provisions
of
section
4
of the
Contingency Fees Act 66 of 1997
. This section applies
where an offer of settlement is received by a party to a contingency
fee agreement. However no
settlement offer had been received.
A draft order also submitted by the plaintiff’s counsel was
prepared on the basis
that L’s educational ceiling would be the
NQF3 level and not the NQF4 level more recently agreed to by the
experts.
10.
In
the circumstances I called the parties to a further hearing on Friday
30 August 2019.
11.
In
the course of the hearing I was informed that there still was no
agreement between the parties on the outstanding issues. It
was
explained to me by counsel that despite the experts’ original
disagreement on the attainable level of education for L
I could rely
on the considerable experience and knowledge of counsel to make a
determination of the matters in disagreement.
I was urged to do
so on the basis of what counsel consider to be the most realistic
postulated scenario. I was informed of the
considerable contribution
that can be made by counsel in matters such as this in which there is
no settlement often because instructions
cannot be obtained.
12.
These
propositions are startling. If there was merit in them then
there would be no point in my having been referred to the
judgment in
BEE v RAF (supra). The Court’s reliance on the agreement
of the experts is entirely different to the situation
that arises
where there is no agreement.
13.
In
determining matters that are in issue for which expert opinion
evidence is required a Court relies on the opinions and reasoning
of
the experts and not on the views of counsel regardless of how
experienced they may be in the field of road accident fund
litigation.
Where the experts cannot agree on any material
issue then the Court with the assistance of counsel experienced and
adept at interrogating
forensically the reasoning of expert witnesses
will consider what they have to say and make a decision based on what
the Court
considers to be the correct thesis.
14.
A
Court may not delegate to counsel, however experienced they may be,
the task of determining the preferred thesis and outcome of
the
matter in dispute regardless of how narrow the divergent views of the
experts may be.
15.
Fortunately
the debate became academic as Ms Scott then was called by the
plaintiff and testified that she was persuaded to concede
that the
NQF4 academic level will probably be achieved by L. Her reasoning was
that she had learnt recently that the school syllabus
at TBE level is
not the same as that of a normal academic matric, that is, that
scholars are pushed through the system and that
a matric pass in
Mathematics is not a requirement for a TBE matric qualification.
16.
Therefore
although Ms Scott was critical of the state of the system of
education in the country she was satisfied that L will achieve
the
NQF4 level. This was after Ms Scott had preferred the NQF3 scenario
originally because NQF4 required the learner to pass matric
English
and Mathematics. Ms Scott opined that L would not be able to do
so.
17.
The
parties are agreed that on any scenario the pre-morbid amount of
prospective earnings would be R4 426 707. A contingency
of
35% applied to R1 619 475 being the post-morbid actual
amount based on the NQF4 scenario according to the actuarial
report
renders the amount to be awarded for loss of future earnings as
R2 267 371.50.
GENERAL
DAMAGES
18.
It
was suggested that an amount of R400 000 is a fair and
reasonable amount for general damages. In this regard there
was
some debate amongst the experts as to whether the head injury
suffered by L was a minor injury or more severe than a minor
injury.
However all the experts agreed that L had sustained at least a mild
traumatic brain injury.
19.
Having
regard to the parameters and discretion of the Court when awarding
general damages an award of R400 000 for general
damages will
adequately compensate for a mild head injury such as that suffered by
L in which there was no neuro physical damage.
THE
CONTINGENCY FEE AGREEMENT
20.
I
requested and was provided with the contingency fee agreement.
Clause 6 of the contingency fee agreement provides that if
the
plaintiff is successful in the proceedings an amount shall be payable
to her attorneys that does not exceed the attorneys’
normal
fees by more than 100% and provided that the success fee shall not
exceed 25% of the full enforceable value (inclusive of
VAT) which
amount shall not include costs.
21.
In
addition to the success fee clause 1 of the contingency fee agreement
records that the attorney will not be entitled to recover
any fees
from the client unless the client is successful in the proceedings or
the attorney becomes entitled to a fee in the event
of partial
success in the proceedings.
22.
However
the agreement also contains a recordal that the plaintiff “
will
be liable to pay the attorney’s disbursements and normal fees
and/or the contingency fee (success fee) in the event of
success or
partial success…”
.
23.
Section
2(1)(a) of the Contingency Fee Act provides that a legal practitioner
may enter into a contingency fee agreement in which
it is agreed that
“…
the
legal practitioner shall not be entitled to any fees for services
rendered … unless such client is successful …
to the
extent set out in such agreement.”
.
24.
As
was observed by Boruchowitz J in
Tjatji
v RAF and 2 Similar Cases
2013
(2) SA 632
(GSJ) in para [12] at p 636 C - E “…
the
Act was intended to be exhaustive of the rights of legal
practitioners to conclude contingency fee agreements with their
clients.
There is no room whatever for a legal practitioner to
enter into a contingency fee agreement with a client outside the
parameters
of the Act or under the common law … Only two forms
of contingency fee agreement are recognised in terms of the Act.
A ‘no win, no fees” agreement (s2(1)(a)); and an
agreement in terms of which a legal practitioner is entitled to fees
equal to or higher than his normal fees if the client is successful
(s2(1)(b)).”
.
25.
The
agreement in question in the matter was entered into in January 2019
more than three years after the commencement of the action.
This in itself might be too late for the proceedings to constitute
compliance with the requirements of the Contingency Fee Act
which
requires a Contingency fee agreement to be entered as early as
possible in proceedings.
26.
The
recordal in clause 2.3 of the agreement suggests that despite the
recordal in clause 1 it is not a “
no
win, no fees”
agreement
as normal fees will be payable together with (and/or) the contingency
fee if the plaintiff is successful.
27.
The
agreement defines the attorney’s normal fees and the success
fee separately. The success fee is restricted in that
it is
stipulated that it shall not exceed the normal fees by more than 100%
nor shall it exceed 25% of the full enforceable value
(presumably of
the claim).
28.
The
agreement therefore is constructed in a manner that entitles the
attorney even if only in the event of success or partial success
to
his normal fee plus a success fee that is not more than double the
normal fee. The success fee itself is said to be limited
to 25%
of the full enforceable value of the claim.
29.
The
agreement therefore is not in accordance with section 2(1)(b) read
with section 2(2) of the Act. These sections limit
the
attorneys’ entitlement to fees that are higher than normal
fees. They do not permit an attorney to be paid a normal
fee
plus a success fee calculated as stipulated in the agreement.
On the contrary they limit the total remuneration of the
attorney
based on the contingency of success to double the normal fee up to
25% of the full enforceable value of the claim including
VAT but
excluding costs.
30.
In
the circumstances the contingency fee agreement is invalid for want
of compliance with the requirements of the Act. Therefore
there
is no need to delve further into the issue of the time when the
agreement was concluded.
ORDER
In the
circumstances the following order is made:
1.
the
defendant shall pay the plaintiff the sum of R2 667 371.50;
2.
the
amount in 1 above is to be paid into the trust bank account of the
plaintiff’s attorneys the particulars of which are:
Renè Fouche Inc.
Standard Bank -
Trust Account, Acc No. […], Branch Code - 004305, Ref.
GPS/RG/D168;
3.
the
defendant shall furnish the plaintiff with an undertaking in terms of
section 17(4)(a)
of the
Road Accident Fund Act 56 of 1996
, for 100%
of the costs of the future accommodation of L D in a hospital or
nursing home or treatment of or rendering of a service
to him or
supplying of goods to him arising out of the injury sustained by him
in the motor vehicle collision which occurred on
18 April 2015, after
such costs have been incurred and upon proof thereof;
4.
the
defendant shall pay the plaintiff’s costs on the High Court
scale either as taxed or agreed to date hereof, such costs
to include
the costs of counsel and of obtaining medico-legal reports and/or
qualifying fees and their attendances at Court, of
the following
experts:
Dr T. Bingle, Ms M. Scott, Dr C.
Naude, Dr A.P.J. Botha, Dr J. van Niekerk, Professor L.A. Chait, Dr
A. Pechè, Dr O. Guy,
Dr J. Goosen, Ms A. Renals, Ms N. Kotze
and Mr N. Lottering as well as the costs of the actuarial reports of
Mr G. Whittaker (Algorithm
Consulting Actuaries);
5.
the
plaintiff shall allow the defendant seven court days to make payment
of the taxed costs;
6.
it
is declared that the contingency fee agreement entered into between
the plaintiff’s attorney Renè Fouche Incorporated
and
the plaintiff is declared to be invalid;
7.
the
plaintiff’s attorney accordingly shall only be entitled to
recover from the plaintiff such fees as are taxed or assessed
on an
attorney and own client basis. The fees recoverable as
aforesaid are not to exceed 25% of the amount awarded to or
recovered
by the plaintiff.
_____________________________
I. MILTZ
ACTING JUDGE OF THE HIGH COURT,
JOHANNESBURG
DATES OF HEARING: 8
AUGUST 2019 AND 30 AUGUST 2019
COUNSEL FOR THE
PLAINTIFF: MS M. LETZLER
INSTRUCTED BY
ATTORNEYS: RENè FOUCHE INCORPORATED
COUNSEL FOR THE
DEFENDANT: MR J. VAN ZYL
INSTRUCTED BY ATTORNEYS: TWALA
ATTORNEYS