Summary of Judgment

1. Introduction

The proceedings were a quantum trial in a motor vehicle accident damages claim brought under the Road Accident Fund Act 56 of 1996. The plaintiff, Mfuneko Aubrey Ndungane, sought compensation from the defendant, the Road Accident Fund (RAF), for bodily injuries sustained in a collision on 26 March 2017.

The matter proceeded on the basis that the defendant had conceded the merits and accepted liability to compensate the plaintiff for 100% of any proven damages arising from the accident. The defendant also tendered an undertaking in terms of section 17(4)(a) of the Act in respect of future medical costs (as reflected in the judgment’s introductory portion).

In the procedural configuration before the court, the adjudication of the plaintiff’s claim for past medical and hospital expenses was postponed to the pretrial roll of 28 August 2023. The issues that remained for determination at the hearing on 2 and 3 May 2023 were limited to (i) the appropriate contingency deductions to be applied to the agreed actuarial calculations of loss of earnings, and (ii) the amount to be awarded for general damages. Judgment was delivered on 10 May 2023.

The dispute therefore concerned the proper quantification of damages where actuarial calculations were common cause in amount, but the parties differed on the contingency rates and on the appropriate figure for non-patrimonial loss (general damages).

2. Material Facts

It was common cause that the plaintiff was injured in a motor vehicle accident on 26 March 2017 and was conveyed by ambulance to Mediclinic Welkom, where he remained until discharge on 4 April 2017. The injuries recorded and relied upon by the court were a fracture of the left ulna, a frontal haematoma, and a concussive head injury.

The sequelae described in the judgment included ongoing daily headaches, pain in the shoulders when handling loads and when ironing clothes, pain in the left forearm, and pain in the legs and knees. The court treated these sequelae as part of the injury profile relevant to the assessment of general damages and the broader evaluation of the plaintiff’s post-accident functioning.

The plaintiff was born in 1954, was 62 years old at the time of the accident, and 68 years old at the time of the hearing. He was self-employed and owned a mobile kitchen which supplemented his income. The judgment records that he was not able to continue with this business after the accident.

In relation to proof and evidentiary posture, the plaintiff led no oral evidence. The defendant accepted the plaintiff’s expert reports delivered under Uniform Rule 36(9)(b), including reports by medical specialists and by an occupational therapist, clinical psychologist, and industrial psychologist. The actuarial calculations for past and future loss of earnings were not in dispute as figures, and the judgment treated the dispute as confined to the basis of the contingency deductions to be applied to those actuarial computations.

The facts in dispute were not disputes about the occurrence of the accident, the concession of liability, or the existence of expert reports, but rather disputes as to what contingencies should be applied to past and future loss of income, and what amount should be awarded as general damages. The plaintiff contended for 5% (past) and 15% (future) contingencies, and R900 000.00 general damages. The defendant contended for 15% (past) and 25% (future) contingencies, and R350 000.00 general damages.

3. Legal Issues

The central legal questions were, first, what contingency deductions were fair and appropriate in the circumstances when quantifying the plaintiff’s loss of earnings using actuarial calculations, and second, what amount constituted fair and adequate compensation for general damages given the injuries and their sequelae.

The issues were not primarily disputes of historical fact, but questions involving the application of legal principles to accepted facts, together with evaluative judgment. In relation to contingencies, the court was required to exercise a discretion recognised in authority, acknowledging that contingency assessment is not logically determinable with precision and depends materially on the trial court’s impression of what is fair. In relation to general damages, the court was likewise required to exercise a wide discretion to arrive at an award that is fair and adequate in all the circumstances.

4. Court’s Reasoning

On contingencies and actuarial quantification, the court approached the matter through established appellate guidance that actuarial computation is a useful method but does not bind the trial court to “inexorable” figures. The court referred to authority recognising that a judge retains a large discretion to award what is considered right, one element of which is making allowance for the vicissitudes of life through a contingency discount. The judgment treated contingencies as inherently arbitrary to a degree, reflecting uncertainty about future events such as health, unemployment, and life expectancy, and as dependent on the circumstances of the particular plaintiff.

Against that legal framework, the court considered the competing submissions on contingency rates. It recorded that the plaintiff’s actuaries (Munro Forensic Actuaries) calculated the net past loss of earnings and future loss of earnings on the basis of 5% and 15% contingencies respectively, yielding a total loss of earnings of R713 725.00. The defendant’s position was to apply higher contingencies (15% and 25%) and it also made concessions in argument that certain amounts in its own calculation should have been different, but the core dispute remained the applicable contingency rates.

In evaluating whether to depart from the plaintiff’s proposed contingencies, the court took into account that the actuarial calculations were made with reference to information contained in the accepted industrial psychologist’s report, and that the defendant had accepted the plaintiff’s expert reports. The judgment emphasised that the defendant had not made out a case justifying deviation from the plaintiff’s contingency approach. The court also referred to an unreported decision (Ndokweni v RAF) in which it was considered there was no good reason to depart from a “normal” deduction of 15% in respect of contingencies; however, in the present matter the court stated it was not persuaded to deviate from the plaintiff’s 5% and 15% contingency proposal, and it concluded that those rates were appropriate in the circumstances.

On general damages, the court applied the principle that a trial court has a wide discretion to award fair and adequate compensation for bodily injuries and their sequelae. The court considered the plaintiff’s age at accident and at trial, his self-employment, and the accepted expert evidence relevant to the consequences of the injuries. In particular, the judgment noted the industrial psychologist’s view that the plaintiff would most likely have continued working in his food business (the mobile kitchen) until the age of 70. It also noted the orthopaedic opinion recorded in the joint orthopaedic report that, from an orthopaedic perspective, the accident and injuries did not have a detrimental effect on the plaintiff’s life expectancy. The court treated the plaintiff’s continued survival and age progression (62 at accident to 68 at trial) as consistent with the conclusion that life expectancy had not been affected.

The court recorded that counsel had referred to comparable awards in other matters, and it indicated that those matters were largely distinguishable because injuries and consequences differed in severity and because plaintiffs’ personal circumstances differed. The court nevertheless accepted that such cases can serve as a guideline. Having weighed the above factors, the court determined that R600 000.00 constituted fair compensation for general damages, rejecting both the plaintiff’s higher figure and the defendant’s lower figure.

5. Outcome and Relief

The court determined that it was fair and just to apply contingency deductions of 5% in respect of past loss of income and 15% in respect of future loss of income. On that basis, it concluded that the defendant was to pay the plaintiff R713 725.00 in respect of past and future loss of earnings.

In respect of general damages, the court awarded the plaintiff R600 000.00.

The judgment records that the defendant had conceded merits at 100%, tendered a section 17(4)(a) undertaking, and that the claim for past medical and hospital expenses was postponed to 28 August 2023. The order made was that the draft order marked “X” was made an order of court; the detailed contents of that draft order (including any costs order) do not appear in the provided text, and the judgment excerpt does not otherwise specify a costs determination.

Cases Cited

Southern Insurance Association Ltd v Bailey NO 1984 (1) SA 98 (AD). Legal Assurance Co Ltd v Boles 1963 (1) SA 608 (A). Van der Plaats v South African Mutual Fire and General Insurance Co Ltd 1980 (3) SA 105 (A). Sandler v Wholesale Coal Suppliers Ltd 1941 AD 194. De Jongh v Gunther and Another 1975 (4) SA 78 (W). AA Mutual Insurance v Maqula 1978 (1) SA 805 (A). Ndokweni v Road Accident Fund (Eastern Cape, Grahamstown High Court, case number 2159/2012) (unreported).

Legislation Cited

Road Accident Fund Act 56 of 1996, in particular section 17(4)(a).

Rules of Court Cited

Uniform Rule 36(9)(b).

Held

The court held that, where actuarial calculations of loss of earnings are accepted but the contingency rates are disputed, the trial court retains a discretion to determine fair contingency deductions having regard to the circumstances and the evidence accepted by agreement between the parties. On the facts before it, the court found no adequate basis advanced by the defendant to justify higher contingency deductions than those used by the plaintiff’s actuary, and it applied 5% to past loss and 15% to future loss.

The court further held that the assessment of general damages is a discretionary evaluative exercise aimed at fair and adequate compensation for bodily injury and sequelae. Having considered the plaintiff’s injuries, ongoing symptoms, personal circumstances, and the expert opinions referred to in the judgment, the court awarded general damages of R600 000.00.

LEGAL PRINCIPLES

A trial court is not bound by actuarial calculations when quantifying loss of earnings, even where actuarial methods are adopted; the court retains a wide discretion to award what is fair and to determine appropriate contingency deductions to account for the vicissitudes of life. The determination of contingencies is not capable of purely logical calculation and necessarily involves an element of arbitrariness informed by the court’s impression of the case and the particular plaintiff’s circumstances.

The quantification of both patrimonial loss (through contingencies) and non-patrimonial loss (general damages) is an exercise rooted in fairness and judicial discretion. In particular, general damages awards are determined by broad considerations aimed at fair and adequate compensation for bodily injuries and their sequelae, with comparable cases serving only as guidelines given that differences in injuries and personal circumstances may render them distinguishable.