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[2020] ZAGPJHC 76
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C V v Road Accident Fund (2016/8525) [2020] ZAGPJHC 76 (5 March 2020)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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SAFLII
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REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE NUMBER: 2016/8525
In
the matter between:-
V:
C
Plaintiff
and
THE
ROAD ACCIDENT FUND
Defendant
JUDGMENT
FMM SNYMAN (AJ)
Introduction
[1]
The matter came before me to determine the
percentage of contingency fee deduction that would be reasonable and
fair as compensation
of the plaintiff’s loss of future income
or potential future earnings.
[2]
The merits of the matter have been
settled between the parties to the effect that the plaintiff would be
entitled to 90% of her
proven loss.
[3]
On 8 March 2015 and the age of 23, whilst
driving a sedan motor vehicle, the plaintiff was in a head-on
collision with a truck.
The South African Police Service Accident
Report reflected that the truck crossed over to the lane in which the
plaintiff was travelling
and collided with her vehicle. The
plaintiff’s vehicle tumbled from the bridge where the vehicles
were traveling and
came to a stop below the bridge. The
plaintiff sustained serious injuries resultant from the collision.
Injuries
and treatment
[4]
The plaintiff suffered “serious
long-term impairment or loss of a body function(s)” as
reflected in the Narrative Test
stipulated in paragraph 5.1 of the
defendant’s RAF 4 Report. Both parties’ medical
experts confirmed that the
plaintiff’s injuries will cause
serious long term impairment to the plaintiff.
[5]
As a result of the collision, the plaintiff
sustained a mild concussion, soft tissue injuries of her neck, blunt
abdominal trauma,
a fracture of her left clavicle, soft tissue
injuries of her left hip, both knees as well as her lower back.
She further
sustained a chest contusion with lacerations and burn
marks to her face and to the right upper side of her chest as well as
a contusion
on her right lower lung. The plaintiff did not have
any pre-existing medical conditions and was “perfectly healthy”
when the collision occurred.
[6]
The plaintiff currently presents with
cervical
spondylosis,
which
is
a general term for age-related wear and tear affecting the spinal
disks in the neck. As the disks dehydrate and shrink, signs
of
osteoarthritis develop, including bony projections along the edges of
bones. She also suffers from chronic mechanical
pains and
headaches. The spondylosis is exacerbated as a result of the
collision. The plaintiff also suffers from severe
restriction
in the movement of her spine, hips and knees.
[7]
It is common cause that the plaintiff
will have to undergo future medical treatment entailing a neck
surgery, arthroscopy of both
knees (which
is
a minimally invasive surgical procedure on a joint in which an
examination and sometimes treatment of damage is performed using
an arthroscope)
and
debridement (which entails
the
removal of damaged tissue or foreign objects from a wound)
for damages to the patella-femoral joints of both knees of the
plaintiff, more specifically
where
the patella (kneecap) and femur (thigh bone) meet at the front of the
knee.
[8]
Both parties’ medical experts also
agree that these surgeries have to be performed at least twice in the
plaintiff’s
lifetime due to her young age at the time of the
collision.
[9]
The neuropsychological assessments
indicated that the plaintiff has reduced cognitive functioning
including persistent difficulties
in her attention span, which
detracts from her ability to sustain performance, encode information
to memory, work quickly and accurately
and complete complex tasks.
Subsequent to the collision she is also prone to making errors under
pressure, she is easily
distracted and her performance accuracy
decreased with the length of individual tasks.
[10]
On a psychological level, the plaintiff
presents with a severe anxiety disorder, major depression, an
adjustment disorder and post-traumatic
stress disorder which includes
hyperarousal of sounds and voices, avoidance of places and people and
intrusive thoughts, all of
which have a negative impact on her work
performance. These impairments are likely to have a continued
reductive impact on
the occupational functioning of the plaintiff.
The presence of chronic pain, loss of full functionality in her lower
back,
legs and knees, would also make it challenging for her to
function optimally in sedentary positions.
[11]
Both parties’ occupational
therapists, however, concluded that the plaintiff would be able to
work within sedentary to light
categories of work and would be able
to cope within her chosen occupation as a senior articles clerk
(actuarial). This comes
with a proviso that the plaintiff be
accommodated by her employer to receive physiotherapy and
rehabilitation to prevent exacerbation
of her symptoms. The
occupational therapists agree that the plaintiff is considered a
vulnerable employee in the open labour
market having her career
prospects negatively affected as a result of the collision.
Education
[12]
The plaintiff completed Grade 12 level
of schooling and thereafter she completed a Higher Certificate in
Business Management Principles
in 2010. She also obtained a
Bachelor of Commerce in Financial Management in 2014. After the
collision in 2015 the
plaintiff was registered as a trainee
accountant with the South African Institute from 9 December 2016 to 9
December 2019 at the
South African Institute of Professional
Accountants (SAIPA).
[13]
The plaintiff was a passionate ballerina
from the age of 3. She completed the Royal Academy Dance
examination in 2011.
She had some professional dancing
experience and performed for Mzansi Productions and she performed in
the Nutcracker during 2009.
Following her dancing career, she
decided to pursue a professional career in accountancy and commenced
work as an accountant article
clerk for JC Scheepers Accounting on 16
February 2015. She was working in this position for a period of
approximately two
weeks when the collision occurred.
[14]
The plaintiff resigned on 31 March 2015
and secured a position as an accountant at MJS Mining Supplies, which
she resigned from
on 30 April 2016. The plaintiff thereafter
secured a position as a trainee accountant at 123 Consulting (PTY) on
3 May 2016,
which position she held in 2017 when the industrial
phycologist reports were drafted.
[15]
The joint minutes of the industrial
psychologists reflect that the plaintiff secured employment in line
with the Paterson B5 median
level (annual package) following the
collision, even with her limitations. This reflects her
potential to progress despite
the injuries sustained in the
collision. These joint minutes also reflect that it is not
unreasonable to assume that the
plaintiff could progress to, at
least, the level of an individual with a degree level of education
which would be earning a total
annual package in line with the
Paterson D1 median level. This would then have inflationary
increases until retirement at
the age of 60 to 65.
[16]
The industrial psychologists further
agree that the plaintiff will experience a 3 to 5 year delay in her
career progression.
They also postulate that
the
plaintiff might be able to function at her pre-morbid levels with the
correct treatment and an accommodative employer.
[17]
Despite the above postulation, both
industrial psychologists recommend the application of a
differentially higher contingency
to be applied to account for (a)
the plaintiff’s time off work to receive the recommended
surgeries and treatment, (b) the
requirement of an accommodative
employer to facilitate and allow time from work for treatment (c) her
limitation in vocational
options due to the injuries, (d) the
plaintiff’s possible slower and decreased salary progression in
not reaching the
same earnings peak as postulated in her uninjured
state, and (e) she can no longer pursue a career in dancing, had she
intended
to do so.
[18]
I hold the view that the plaintiff’s
quality of work may be negatively impacted in that she would not be
able to ventilate
stress through dancing as a result of the
collision. Subsequent to the collision she is left with
a
greater chance of being subjected to the vicissitudes of life.
(
Southern
Insurance Association Ltd v Bailey NO
1984
(1) SA 98
(A) at 119D – H).
Assessment
[19]
It is so that the plaintiff’s life
has irreparably been altered by the collision. For pain and
suffering, and loss of
life’s amenities the plaintiff is
compensated in the amount of general damages, an amount that the
parties have settled
inter partes
.
I have to assess what percentage of contingency would be fair and
reasonable to apply to the plaintiffs’ future
loss of income,
alternatively potential loss of earnings.
[20]
The Supreme Court of Appeal has recently
held in
Road Accident Fund v Kerridge
2019 (2) SA 233
(SCA) in paragraph
40:
“
[40]
Any claim for future loss of earning capacity requires a comparison
of what a claimant would have earned had the accident not
occurred,
with what a claimant is likely to earn thereafter. The loss is the
difference between the monetary value of the earning
capacity
immediately prior to the injury and immediately thereafter. This can
never be a matter of exact mathematical calculation
and is, of its
nature, a highly speculative inquiry. All the court can do is make an
estimate, which is often a very rough estimate,
of the present value
of the loss.”
Calculations
of contingencies
[21]
In
Botha
v Road Accident Fund
2015 (2) SA 108
(GP) it was held by Victor J that:
“
[33]
The once-and-for-all rule is of importance here. It cannot assist a
plaintiff who may in the future, depending on the nature
of the
injury, be subjected to a loss of earning capacity which he/she
cannot quantify with exactitude at the time of trial. Therefore,
based on this principle, the court must at this stage determine the
question of future loss of income.”
[22]
In determining what percentage of
contingency deferential would be fair and reasonable, I take guidance
from Nicholas JA, set out
in
Southern
Insurance Association Ltd v Bailey NO
1984 (1) SA 98
(A) at 113G – 114A, where he stated as follows:
“
It
has open to it two possible approaches. One is for a 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
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 greater or lesser extent. But the court cannot
for this reason adopt a
non possumus
attitude and make no award.”
[23]
In
Sil and
Others v Road Accident Fund
2013 (3) SA
402
(GSJ) it was held by Sutherland J as follows:
“
[13]
An 'annual loss' cannot be the equivalent of the 'annual income'
because the projected annual income is merely a part of the
exercise
in calculating the actual loss. In projecting a future actual loss,
the exercise contemplates the chances of not achieving
the projected
rate of earnings by factoring in predictable risks. Those risks are
expressed as the given contingencies. There is
no other place in the
calculation process where, sensibly, the contingencies could be
usefully intruded into a calculation of loss,
that is to say the net
loss or, more appropriately, the 'actual loss'. The important point
to guard against is employing phraseology
that is likely to obscure
the critical point that the word 'loss' ought to be reserved for what
is indeed suffered, and used to
allude to what is to be paid by way
of compensation.”
[24]
Mr Tshimna argued on behalf of the
defendant that the plaintiff has not suffered any mental status
impairment or disability which
could prevent her from performing any
actions, which include the complete and full execution of her
occupational duties.
This is indeed stated as such by the
plaintiff’s neurologist. I accept that on a clinical
level the mental status of
the plaintiff has not been impaired.
However, in the joint minutes the clinical psychologists agree that
the plaintiff has
suffered severe psychological damages as set out in
paragraph 10 above. These psychological impairments will most
definitely
have a negative impact on the plaintiff’s
performance at work.
[25]
The defendant’s argument is based on
the further premises that the industrial psychologists postulate a
delay of 3 to 5 years
in career progression, and as such the future
loss of income for the plaintiff should be limited to a period of 3
to 5 years.
Put differently, the defendant advances that the
plaintiff should be compensated only for the 3 to 5 years that she
would be disadvantaged
as a result of the collision.
[26]
The defendant further argues that, due
to the plaintiff’s potential capability to reach her pre-morbid
future income, a contingency
differential of 5% would be just and
fair.
[27]
Application of the defendant’s argued
contingencies would result in a monetary amount of R 838,572.
This is calculated
as follows:
20%
25%
5%
Had accident not happened
Now that accident did happen
Difference = Loss
Future earnings
R 9,772,690
R9,306,106
Less contingency deduction
R 1,954,538
R 2,326,526
Total loss of future earnings
R7,818,152
R 6 979 579
R 838,573
[28]
The plaintiff’s argument is that a
higher contingency should be allowed, on the basis as set out in
paragraphs 15 and 17 above
and agreed upon by the industrial
psychologists. The plaintiff argues that a contingency of 20%
should be allowed on the
scenario “but
for
the incident” as 20% is the “norm” for future loss
of income, and a contingency of 50% should be applied on
the scenario
“having regard to the incident” which would be a high
contingency and justifiable in these circumstances.
This would
leave the plaintiff with a contingency differential of 30%.
[29]
On the other hand, the application of
the plaintiff’s argued contingencies would result in a monetary
loss of R3,297,150,
calculated as follows:
20%
50%
30%
Had accident not happened
Now that accident did happen
Difference = Loss
Future earnings
R 10,212,862
R9,746,278
Less contingency deduction
R 2,042,572
R4,873,139
Total loss of future earnings
R 8,170,289
R4,873,139
R 3,297,150
[30]
I deem it necessary to repeat that both
parties’ experts agree that the plaintiff, with the correct
medical care, surgeries
and rehabilitation, may recover to such an
extent that she might have the potential to reach her pre-morbid
condition since she
was only 23 when the collision occurred.
The counter to that argument, however, is that the plaintiff is at
much more risk
having regard thereto that every surgery carries with
it, its own risks of complications, with anaesthetics and unforeseen
surgical
implications and as such might leave the plaintiff with much
less potential to reach her pre-morbid condition. These
conditions
are also taken into account when determining a fair and
reasonable percentage of contingencies.
[31]
Having considered the various medico-legal
reports, the different legal approaches and the submissions by
counsel for both the plaintiff
and defendant, I am persuaded that
application of contingencies as set out in paragraph 33 hereunder
would be reasonable and fair
in these circumstances.
[32]
In determining the monetary amount with
application of the contingencies, I use the values of the defendant’s
industrial psychologist.
These values take into account future
earnings on scenarios had the accident not occurred and now that
accident had indeed occurred.
Application of 20% on the
pre-morbid scenario, and application of 35% on the post-morbid
scenario, leads to a contingency differential
of 15% which would
result in the monetary amount R1,769,183. This monetary amount
of R1,769,183 is calculated as follows:
20%
35%
15%
Had accident not happened
Now that accident did happen
Difference = Loss
Future earnings
R 9,772,690
R9,306,106
Less contingency deduction
R 1,954,538
R3,257,137
Total loss of future earnings
R7,818,152
R6,048,986
R1,769,183
[33]
I was not made aware of any contingency fee agreement.
I
make the following order:
1.
The defendant is liable to compensate the
plaintiff for 90% (ninety percent) of the plaintiff’s delictual
damages suffered
as a result of the motor vehicle collision on 8
March 2015.
2. The
issue of the plaintiff’s past hospital and medical expenses is
separated from all the other heads of damages in terms
of Rule 33(4)
of the Uniform Rules of Court, and is postponed
sine
die.
3.
The defendant shall pay the capital amount
of
R2,219,183.00
(Two Million Two Hundred and Nineteen Thousand, One Hundred and
Eighty Three Rand)
for the
following delictual damages, calculated as follows:
3.1 Loss of Earnings:
R 1,769,183.00
3.2 General
Damages:
R _450,000.00
3.3
Total:
R 2,219,183.00
4. The
capital amount is payable by means of direct fund transfer on or into
the trust bank account of the plaintiff’s attorneys;
Du Plessis
Attornsy,l 2
nd
Floor 88 Fox Street, Cnr Harrison Street, Johannesburg Tel (011) 331
1223; Fax (011) 331 8828 Ref Mr M du Plessis / V.
5. No
interest will be payable except in the event of default of payment
before or on 31 March 2020 in which case interest will
be payable at
the rate of 10% calculated on the capital amount from the date of
this judgment.
6. The
defendant shall furnish plaintiff with an undertaking in terms of
section 17(4)(a)
of the
Road Accident Fund Act, 56 of 1996
, of
the costs of the future accommodation of the plaintiff in a hospital
and nursing home and treatment of and rendering
of a service to the
plaintiff and supplying of goods to the plaintiff arising out of the
injuries sustained by the plaintiff in
the motor vehicle collision on
8 March 2015 after such costs have been incurred and upon proof
thereof;
7. The
defendant shall pay the plaintiff’s taxed or agreed party and
party costs up to 20 February 2020 on the High Court
scale, which
party and party costs shall include, but not be limited to:
7.1
The reasonable costs in respect of the preparation of the medico
legal reports, consultations with the medical experts, completing
the
RAF 4 serious injury assessment with evaluation as well as the
actuarial calculations, and other expert accounts;
7.2
Consultations when detailed instructions were given due to the
complexities of the matter;
7.3
Costs of counsel;
7.4
The travelling costs of the plaintiff to and from all medico-legal
appointments and consultations;
7.5
The cost of the preparation and making 5 copies of all bundles for
purpose of trial;
7.6
Qualifying and / or reservation and / or preparation fees, if any for
the trial on 20 February 2020 to be proven to the taxing
master of
the plaintiff’s expert witnesses.
7.7 As
well as the reasonable preparation fees of the
overlapping experts in respect of the joint meeting discussions,
preparation and
drawing of the joint expert minutes;
7.8
Any costs attendant upon the obtaining of payment of the capital
amount referred to in paragraph 3
supra
,
as well as any costs attended upon the obtaining of payment of the
taxed costs.
8.
Subject to the following conditions:
8.1
The plaintiff shall, in the event that costs are not agreed, serve
the notice of taxation on the defendant’s attorney
of record;
and
8.2 The plaintiff shall
allow the defendant 14 (fourteen) court days to make payment of the
taxed costs. No interest will
be payable, except in the event
of default of payment of such costs, in which case interest will be
payable at the rate of 10%
from date of taxation.
_________________________________
FMM SNYMAN, AJ
ACTING JUDGE OF THE
HIGH COURT
DATE OF HEARING: 20
FEBRUARY 2020
DATE
OF JUDGMENT: 05 MARCH 2020
Appearance for the
appellant: Adv J Nell
Instructed
by Du Plessis Attorneys
Tel:
011 331 1223
Appearance for the
respondent: Adv Tshimna
Instructed
by Twala Attorneys
Tel:
011 832 2073