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[2017] ZAECPEHC 30
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Esau v Road Accident (3410/15) [2017] ZAECPEHC 30 (1 June 2017)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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SAFLII
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IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH
Case
no. 3410/15
Dates
heard: 10-11/5/17
Date
delivered: 1/6/17
Not
reportable
In
the matter between:
JOHANNES
ESAU
Plaintiff
and
ROAD
ACCIDENT FUND
Defendant
JUDGMENT
PLASKET,
J:
[1]
On 26 July 2011, the plaintiff, Mr Johannes Esau, was a passenger in
a vehicle when a collision occurred on the N2 Freeway in
Port
Elizabeth that involved that vehicle and 14 other vehicles. As a
result of the collision, Mr Esau was seriously injured.
[2]
In the proceedings he instituted against the defendant, the Road
Accident Fund (the RAF), it admitted the negligence of one
Van
Rensburg in causing the collision. It also admitted and settled the
general damages suffered by Mr Esau. It tendered an undertaking
for
his future medical expenses. The only issues left unresolved were the
RAF’s liability for Mr Esau’s past and future
loss of
earnings. He claimed an amount of R1 954 500 in respect of
these heads of damage.
[3]
The parties reached a wide range of agreements. Two are relevant for
present purposes. First, it was agreed that as a result
of the
injuries suffered by Mr Esau, he has been rendered permanently
unemployable in the open labour market. Secondly, they agreed
that he
has been ‘the recipient of a State disability grant, for which
he has been paid the total amount of R41 985.16,
calculated to
the end of May 2017, which amount the parties further agree is to be
deducted from the Plaintiff’s claim
for loss of
earnings’. During the course of the trial, another agreement
was reached to the effect that Premium Construction,
Mr Esau’s
employer at the time, paid him R10 896.95 after the collision,
which is to be deducted from the award in respect
of past loss of
earnings.
[4]
Two witnesses, Dr Karen Piro, an industrial psychologist, and Mr
Esau, were called to testify in support of the plaintiff’s
case. No witnesses were called by the RAF.
[5]
I shall deal first with the evidence of Mr Esau. He was an excellent
witness whose honesty was evident. Indeed, Mr Frost for
the RAF
pointed out that at times his honesty tended to work against his own
interest. No criticism of any sort was levelled against
him, and nor
could it have been.
[6]
Mr Esau was born on [...] 1966 on a farm in the Willowmore district.
He was one of 11 children born to his parents. He left
school with a
standard 7 qualification. The reason for leaving was economic: all of
the children wanted an education but he had
to leave school in order
to work to make that possible.
[7]
He first worked as a farm labourer. He worked on two farms in the
Willowmore district. He then left the district and moved to
Port
Elizabeth to look for work. He found employment at a firm that
manufactured rope. He worked there for seven years as a fork-lift
driver.
[8]
Having then been retrenched, he was unemployed for a while. He and
his wife-to-be moved to Bedford, her home town. There he
found
employment. He was employed by a man by the name of Gerald who was a
sub-contractor in a project to build RDP houses. This
appears to have
been in the mid-1990’s because Mr Esau said that he and his
wife married in Bedford in 1996.
[9]
Although he started to work for Gerald as a general labourer, he
learnt on the job and acquired skills in plastering and bricklaying.
He spent five years in Bedford working for Gerald.
[10]
When the RDP houses were built, he moved back to Port Elizabeth,
along with Gerald. He continued to work for Gerald as a bricklayer.
Gerald sub-contracted to a firm called Keogh Construction. Mr Esau
left Gerald‘s employ to form a partnership with his
brother-in-law,
Mr Reuben Myburgh. They engaged in sub-contracting in
the building industry. They worked for about three years as
sub-contractors
for Mr Marcus Koen and Mr Juan Hattingh building
townhouses. They employed general labourers to work for them. Mr Esau
and Mr Myburgh
appear to have done the bricklaying work. They were
paid on the completion of each unit.
[11]
Once the work for Mr Koen and Mr Hattingh ended, Mr Esau was
unemployed for a few months. He then engaged in casual small-scale
building work for the next year and a half.
[12]
Then, Mr Esau heard that a firm called Premium Construction was in
need of the services of a bricklayer. He approached a foreman
by the
name of Omar and was employed as a bricklayer. This was in
mid–January 2011 at the end of the builders’ break.
[13]
Premium Construction was involved in the building of townhouses in
various parts of Port Elizabeth. He worked five days a week
from
08h00 to 17h00, in the absence of inclement weather and other
vagaries that plague the building industry. He also worked
overtime on Saturdays when necessary. When he worked on a Saturday he
would, as a rule, work for six hours. He worked overtime
as much as
two Saturdays per month.
[14]
His hourly rate of pay at Premium Construction was R36.89 per hour.
He was paid fortnightly. If he worked a full week and no
overtime,
his pay was R1 475.60.
[15]
For the first five months at Premium Construction he was paid in cash
every fortnight. Then he was asked to open a bank account,
which he
did. Payments thereafter were paid into that account. There is
nothing to indicate that Mr Esau was employed in a temporary
capacity. The probabilities are in favour of him being a permanent
employee.
[16]
Mr Esau testified that transport to and from work cost him nothing:
he walked from his home in Malabar to a point where a Premium
Construction vehicle picked him up along with his colleagues and took
them to the building site. At the end of the working day
they were
dropped off at the same place and walked home.
[17]
It appears from a pay slip issued to Mr Esau by Premium Construction
that deductions were made for holiday pay as well as unemployment
insurance. The evidence of Dr Piro was that an employee in Mr Esau’s
position would, after 18 months, have become a member
of a provident
or pension fund to make provision for retirement.
[18]
She described Mr Esau as a skilled bricklayer who earned a wage at
the top end of the semi-skilled scale. This was so only
because he
had learnt his trade on the job and did not have ‘trade papers’
– a formal qualification. She described
his rate of pay as good
compared to the norms of the construction industry.
[19]
As far as his probable career path is concerned, she testified that
Mr Esau was 44 years old at the time of the accident. She
described
him as being a strong, strapping man when she first met him. As he
had worked for some 25 years in the construction industry,
it was
probable that he would have remained in that industry until
retirement at the age of 65 years, and that he would have continued
throughout to work as a bricklayer. Her evidence accords with Mr
Esau’s evidence that he would have worked as a bricklayer
until
65 years for two reasons: first, he enjoyed the work and secondly, he
had to work as a result of economic necessity.
[20]
Dr Piro was of the view that it is likely that Mr Esau’s salary
would have escalated by eight percent per year. She based
this on the
trend in the industry of increases varying between eight and ten
percent per year for the years 2013 to 2016 and her
belief that
similar increases were likely in the future.
[21]
Dr Piro’s further assumptions were that Mr Esau earned
R1 475.60 per week at a rate of pay of R36.89 per hour for
a 40
hour work week; that he would have been eligible for retirement
benefits to which his employer would contribute a portion;
and that
he would be entitled to an annual bonus of 20 working days.
[22]
In
Southern
Insurance Association Ltd v Bailey NO
[1]
Nicholas JA dealt with how to approach the problem of quantifying a
claim for this type of loss. He said:
‘
Any
enquiry into damages for loss of earning capacity is of its nature
speculative, because it involves a prediction as to the future,
without the benefit of crystal balls, soothsayers, augurs or oracles.
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.’
[23]
The second method referred to by Nicholas JA is a more rational way
of determining damages because ‘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’.
[2]
Where actuarial calculations are relied upon, the judge still retains
a discretion in the quantification of damages. In
Legal
Insurance Company Ltd v Botes
[3]
Holmes JA stated:
‘
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]
For the most part, the assumptions drawn from the evidence of Dr Piro
and then used for the actuarial calculations appear to
me to be
reasonable. It was argued by Mr Frost that it was probable that Mr
Esau would usually earn less than R1 475, 60 per week
and that he
would only be paid for 48 weeks and not 52 weeks because of the
builders’ break. While it is so that Mr
Esau said that
inclement weather and other factors interfered with a bricklayer’s
ability to work a full 40 hour week, he
also said that he worked
overtime for as much as two Saturdays a month of six hours each.
Secondly, it appears from his salary
slip that a deduction was made
so that he could be paid for the builder’s break.
[26]
In the circumstances, I am satisfied that the amount of R 1 475.60
per week is a reasonable figure to use in order to calculate
Mr
Esau’s loss of earnings. It is based on the best evidence
available: even if the end result has something of a give and
take
aspect to it, I am satisfied that it is fair and reasonable. The
contingency deductions I shall make will take account of
the
uncertainties that Mr Frost has raised. I am also satisfied that the
evidence establishes a proper basis for escalating Mr
Esau’s
earnings at eight percent per year.
[27]
That brings me to the contingency deductions that must be made. Mr
Paterson, who appeared for Mr Esau, proposed a deduction
of ten
percent to the past loss of earnings and of 20 percent to the future
loss of earnings. Mr Frost, on the other hand,
argued for
higher percentages: 30 percent in respect of past loss of earnings
and 50 percent in respect of future loss of earnings.
[28]
I was referred by Mr Paterson to three judgments to serve as a guide
to the contingency deductions to be made. In the first,
Bamfo
v RAF
,
[4]
the plaintiff was, like Mr Esau, a self-taught bricklayer who had
worked for a number of years in various jobs in the construction
industry. He was also of a similar age to Mr Esau and the court was
also confronted with a paucity of information as to earnings
in the
past. Contingency deductions of five and 15 percent were applied.
[29]
In
Mullins
v Road Accident Fund
[5]
the plaintiff was a self-employed and self-taught painter and
crede-stone skimmer. He appears to have been somewhat younger than
Mr
Esau and his employment history was not as solid. As with Mr Esau,
much of his work involved working for sub-contractors and
his income
tended to vary. There was also, as in this case, a dearth of records
concerning the plaintiff’s earnings.
A 20 percent
contingency deduction was made for both past and future loss of
earnings.
[30]
Finally, in
Sofute
v RAF
,
[6]
the plaintiff was a lot younger than Mr Esau. He had worked as a
general labourer. His employment history was far shorter that
Mr
Esau’s and his future prospects far more uncertain. Contingency
deductions of 20 percent in respect of past loss of earnings
and 20
percent for future loss of earnings were made.
[31]
In my view, Mr Esau’s position is fairly similar to the
position of the plaintiff in
Bamfo’s
case. While I can see no reason not to be guided by Griffith’s
J’s decision on the contingency deductions of five and
15
percent, slightly higher contingency deductions are justified in this
case to cater for some of the uncertainties I have outlined
–
and the ‘give and take’ aspects that I have referred to.
I shall make a ten percent deduction in respect of
past loss of
earnings and a 20 percent deduction in respect of future loss of
earnings, in accordance with Mr Paterson’s
submissions.
[32]
Finally, it was argued that the disability grant that Mr Esau
currently receives must be deducted from the award for his future
loss of earnings. No evidence was placed before me to the effect that
Mr Esau would continue to be eligible for a disability grant
after he
has been compensated by the RAF. In those circumstances, I am
not in a position to conclude that the disability
grant should be
deducted.
[33]
I accept the actuarial calculations based on the base-line salary of
R1 475.60 per week and its escalation at eight percent
per year.
The amount established on this basis for past loss of earnings is
thus R584 200. From that figure a total of R52 882
must be
deducted in respect of Mr Esau’s disability grant that has been
paid to him and the post-accident salary that Premium
Construction
paid him. That leaves a total of R531 318 from which a ten
percent deduction must be made. That, in turn, results
in a past loss
of earnings of R478 187. The gross figure for Mr Esau’s
future loss of earnings is R1 370 300.
From this must be
deducted a 20 percent contingency deduction, leaving a sum of
R1 096 240. The total amount after deductions
is
R1 574 427.
[34]
In the result, I make the following order.
(a)
The defendant is directed to pay to the plaintiff R1 574 427
as damages for past and future loss of earnings.
(b)
The defendant is directed to pay the plaintiff’s costs,
including the costs of expert witnesses in respect of whom expert
notices had been filed.
_______________________
C
Plasket
Judge
of the High Court
APPEARANCES
For
the plaintiff: Mr N Pateron instructed by Jaco Hattingh Attorneys,
Port Elizabeth
For
the defendant: Mr A Frost instructed by Joubert Galpin Searle Inc,
Port Elizabeth
[1]
Southern
Insurance Association Ltd v Bailey NO
1984
(1) SA 98
(A), 113G-114A.
[2]
Southern Insurance Association Ltd
v Bailey NO
(note 1),
114D-E. See too
Goldie v
City Council of Johannesburg
1948 (2) SA 913 (W), 920.
[3]
Legal Insurance
Company Ltd v Botes
1963
(1) SA 608
(A), 614F-G.
[4]
Bamfo v RAF
[2011]
JOL 27932
(E).
[5]
Mullins v Road Accident Fund
ECP
4 August 2016 (case no. 3650/14) unreported.
[6]
Sofute v RAF
[2008]
JOL 21745
(Ck).