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2023
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[2023] ZAFSHC 248
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Scheepers v Road Accident Fund (893/2021) [2023] ZAFSHC 248 (20 June 2023)
FLYNOTE:
ACTUARIAL
– Loss of income – Early retirement – Suffering
serious injuries from motor accident – Accepted
that plaintiff
would retire early – No evidence regarding post-retirement
remuneration had the accident not happened, such
as salary for
remainder of his life, retirement funding and company shareholding –
Court not satisfied that injuries have
caused a loss of earning
capacity or will cause a loss of earnings in the future to the extent
claimed.
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,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 893/2021
REPORTABLE: YES/NO
OF INTEREST TO OTHER
JUDGES: YES/NO
CIRCULATE
TO MAGISTRATES: YES/NO
In
the matter between:
JOE
SCHEEPERS
PLAINTIFF
And
ROAD ACCIDENT FUND
DEFENDANT
CORAM:
NAIDOO
J
HEARD
ON: 8
MARCH 2023
DELIVERED
ON: 20
JUNE
2023
JUDGMENT
[1]
The plaintiff, Joe Scheepers (the
plaintiff), issued summons against the defendant, the Road Accident
Fund (RAF) for damages arising out of injuries suffered by him, in a
motor vehicle accident which occurred on 20 March 2019, on
the N1
South at the point described as N1-15: 47.05, Bloemfontein, in the
Free State Province. The plaintiff was the driver of
a Toyota Hilux
vehicle, which was involved in a collision with another vehicle. The
driver of the latter mentioned vehicle lost
control of her vehicle
and collided head on with the plaintiff’s vehicle. RAF had
previously conceded merits and negligence
at 100% and the matter in
respect of liability became settled on 6 November 2020. By the time
the matter came before me for the
hearing of the trial in respect of
quantum, general damages became settled (on the morning of the first
day of trial on 7 March
2023), as well as future medical and hospital
expenses. RAF furnished an undertaking in terms of
section 17(4)(a)
of the
Road Accident Fund Act 56 of 1996
in respect of those
expenses. The only issues for this court to adjudicate were the past
medical expenses and the past and future
loss of earnings,
particularly the percentage of the contingency deduction. Adv (Mr) H
De La Rey represented the plaintiff and
Ms M Booysen represented RAF.
[2]
The parties advised the court that RAF admitted all the expert
reports filed by the plaintiff,
and the truth of the contents
thereof. RAF did not file any expert reports. Ms Booysen confirmed
this and also that general damages
were settled in the amount of One
Million Three Hundred Thousand Rand (R1 300 000.00), that the
undertaking in respect of future
medical expenses has been furnished
to the plaintiff, and that the only issues for adjudication were the
past medical expenses
and the loss of earnings. With regard to the
past medical expenses, Ms Booysen indicated that there is pending
litigation regarding
an internal memorandum issued by RAF saying they
will no longer make offers on past medical expenses. The memorandum
was successfully
reviewed and set aside by the High Court. RAF is now
appealing that decision in the Supreme Court of Appeal (SCA). She
requested
that the issue of past medical expenses stand over pending
a decision by the SCA. I will deal further with this issue later.
[3]
The plaintiff was three months away from his 39
th
birthday
at the time of the accident and was employed as an Operational
Director at African Mining and Crushing prior to the accident.
After
a six-month absence from work to recuperate from his injuries, he
returned to work and continued to be employed in the capacity
of
Operational Director, with no change in his remuneration The injuries
he suffered are recorded as right open midshaft tibia
fracture, right
neck of femur fracture, as well as a midshaft comminuted femur
fracture and left ankle fracture. He also appears
to have sustained
lacerations on both arms and an open wound on his left foot/heel. He
was hospitalised, initially in the intensive
care unit and thereafter
transferred to a general ward. He was transferred to a Stepdown
facility for rehabilitation and discharged
from hospital on 7 May
2019. He underwent further surgery during November 2020. By the time
he was seen by Drs Oelofse and Deacon,
the Orthopaedic Surgeons, on
31 March 2021, most of his orthopaedic injuries were healed and the
doctors recorded that he had no
current complaints in respect of
those injuries. However, there were orthopaedic challenges that would
affect the plaintiff negatively
for the rest of his life. I will deal
with these later.
[4]
The plaintiff was examined and interviewed by various medical
experts, between March 2021 and
June 2022. Where necessary, I will
deal only with those experts reports and/or opinions which have a
bearing on the issues to be
adjudicated by this court. As mentioned,
RAF did not engage any experts, and appears to rely on the reports of
the experts engaged
by the plaintiff. They, however, take issue only
with the contingency deduction applied to future loss of earnings,
which I will
deal with later. The following is gleaned from the
medico-legal reports filed, and is accepted to be common cause as no
issue has
been taken with same:
4.1
The plaintiff was unable to work for six months after the accident;
4.2
The plaintiff suffered restrictions on his ability to participate in
vigorous activity and outdoor hobbies
after the accident;
4.3
By June 2022, the Neurosurgeon records the plaintiff’s main
complaints to be right leg pain, headaches,
change in behaviour
forgetfulness and anxiety symptoms;
4.4
He suffered mild neurophsychological alteration, which did not affect
his ability to assume normal roles
or perform tasks and activities of
daily living;
4.5
His cognitive functions were not significantly impacted by the
accident;
4.6
the plaintiff suffered multiple scarring and disfigurement to his
left hand and to lower limbs, which
are permanent, as plastic surgery
for these scars is not recommended.
4.7
The plaintiff has continued to be employed in his pre-accident
position and continues to earn the same
salary and financial
benefits.
[5]
The orthopaedic surgeons, Drs Oelofse and Deacon, recorded that
The plaintiff still
experienced pain in his right femur, right knee, right lower leg and
left foot, with occasional swelling of
the left foot. The pain in his
right and left legs becomes more pronounced in inclement weather or
when he engaged in physical
activity. Long periods of mobility also
increased the pain. The pain in his left foot is aggravated by
ascending and descending
stairs, and the foot becomes stiff with
extended periods of sitting. The doctors diagnosed that the
plaintiff’s pain and/or
disability was due to a number of
factors, such as a malunited femur fracture, ligament injury of the
right knee, requiring ligament
reconstruction, united tibia/fibula
fractures, plantar fasciitis of the left foot and a leg length
discrepancy of about 2cm, which
contributes to an uneven gait and
hence increases pain.
[6]
The orthopaedic doctors concluded that the plaintiff sustained
serious injuries requiring multiple
future surgeries in the short,
medium and long term. They recommended a wide range of medical
interventions, and the cost thereof,
to reduce the plaintiff’s
disability and improve his quality of life. The doctors also opined
that there is a high probability
of the right hip and right knee
degenerating and progressing to osteoarthritis. The recommended
treatment included total replacement
of the right hip and right knee.
In consulting the relevant medical literature, they stated that even
with improved surgical techniques
and advancement in the development
of artificial joints, it is a fact that such joints will only last
between 12 and 15 years,
requiring replacement upon the effluxion of
that period. The doctors also indicated that the plaintiff would need
extended periods
of sick leave, depending on the type of surgery that
he undergoes, which would impact on his productivity at work. It will
also
affect his amenities of life and may impact on his retirement
age.
[7]
It is not in dispute that the plaintiff sustained serious injuries
and that he would, in all probability,
be forced to retire earlier
than the normal retirement age of 65 years. To this end the parties
agreed on a retirement age of 57
years and 6 months. On 24
February 2023, the Industrial Psychologist, Ms Carina Steenkamp
prepared an update on her initial report.
She took into account what
the other medical practitioners had said in their reports, and also
that of the Occupational Therapist,
Ms Frizelna Steyn. The latter
indicated that the plaintiff’s pre-accident work as an
Operational Director is classified as
sedentary and light work.
However, prolonged static positions such as standing or sitting, as
well as activities that require stooping,
climbing stairs and walking
will exacerbate his symptoms. He is permanently unsuited for manual
occupations. In view of his work
as an Operational Director being
classified as sedentary, Ms Steyn opines that the plaintiff retains
the physical capacity to engage
in most of the inherent job
requirements, although he will require reasonable accommodation such
as frequent breaks and position
changes. It is further her opinion
that the plaintiff may be able to cope with work demands for some
years to come
[8]
Ms Steenkamp records that while the plaintiff recuperated for 6
months after the accident, he
received his full salary but missed out
on benefits such as performance bonuses. She obtained collateral
information from the HR
Director at the plaintiff’s place of
employment, which indicated that as a majority shareholder and
Director, there is no
scope for progression and the plaintiff’s
earnings remain subject to the performance of the Division. The
company pays a
6-monthly incentive bonus, depending on the
performance of the company and a 13
th
cheque, but these
are not payments the company is contractually obliged to make.
[9]
Ms Steenkamp also records that after his return to work following his
6-month recuperation period,
the plaintiff was placed on light duty
and was office-based. He reported to her in the course of her
compiling her updated report,
that he had started to travel again (as
required by his job) and had also started undertaking site visits
which is a further requirement
of his job. He is still working in his
pre-accident position as a Director. Ms Steenkamp concludes, on
the basis of all the
information at her disposal, that the plaintiff
should be able to continue in his accommodated position for the
foreseeable future.
However, if his anticipated early retirement
comes to pass, she postulates that his fixed salary will increase in
line with annual
inflation, until he retires. She further postulates
that although the plaintiff should be able to continue in his present
position,
there may be factors which would negatively impact his
occupational performance and which cannot be quantified. She suggests
that
a higher-than-normal post-accident contingency deduction be
applied, to cater for these factors.
[10]
As indicated, the issues between the parties appear to be the payment
of past medical expenses and RAF’s
disagreement with the
percentage of the contingency deductions applied to the future loss
of earnings. It is trite that the percentage
of the contingency
deduction is in the discretion of the court, which discretion must be
exercised judiciously, taking into account
all relevant factors. The
parties made their submissions in respect of their respective cases
during oral arguments in court. RAF
is in essence in agreement with
the findings of the various experts who filed reports in this matter.
With regard to past medical
expenses, Ms Booysen even indicated that
while there is no dispute as to the content of the schedule of
payments submitted by the
plaintiff, she was of the view that it
would be prudent to wait for the ruling of the SCA with regard to
whether RAF should pay
the past medical expenses, which were paid by
the plaintiff’s medical aid fund.
[11]
Mr De La Rey argued that the internal memorandum issued by RAF is not
law, so even if the SCA finds that
it could issue such a memorandum,
the position in law is not affected. The court is still empowered to
make an order for the payment
of past medical expenses. It seems that
the relief sought by RAF goes a little further than simply an order
as to whether its decision
to reject claims for past medical
expenses, which the plaintiff has not paid, but which were paid for
by a medical aid fund, was
unlawful and reviewable. Ms Booysen handed
up a copy of the application for leave to appeal to the SCA, in the
matter of
Road Accident Fund v Discovery Health (Pty) Ltd.
In
that matter the issues in dispute between the parties, and which the
SCA is called upon to adjudicate in order to grant the
relief sought
by RAF, are whether:
“
3.3.1
a road accident victim has a claim against the Fund for past medical
expenses which he or she did not incur and did not in
law become
liable to pay;
3.3.2
medical schemes have a reimbursement claim against their members
where their past medical costs incurred as a
result of a motor
vehicle accident have been paid by medical schemes in discharging
their obligations towards their members’
medical services
providers; and
3.3.3
the Fund’s decision to reject claims for past medical expenses
in circumstances where the claimant did not
in fact and in law incur
and become liable for such expenses is unlawful and reviewable.”
[12]
It would appear that the issues mentioned affect the public interest.
If leave is granted to RAF to prosecute
the appeal in the SCA, a
decision in favour of RAF would have a significant impact on the
offers it would in future make in respect
of claims lodged with RAF.
A decision in favour of Discovery Health would, likewise, be
determinative of how RAF would in the future,
deal with such claims.
I am in agreement with Ms Booysen’s proposal that the
plaintiff’s claim for past medical expenses
stand over, pending
a decision by the SCA on whether leave to appeal will be granted to
RAF
[13]
I turn now to deal with the claim for loss of earnings. Apart from
RAF’s disagreement with the contingency
deduction which was
applied to the future loss of earnings, Ms Booysen argued that the
amount of R84 099.00 (an incentive
bonus) taken as past loss of
earnings in the actuarial calculations, is not a peremptory payment
and depends on the performance
of the division. The plaintiff,
therefore, did not suffer a loss of earnings. I mentioned
earlier that the HR Director at
African Mining and Crushing (where
the plaintiff is employed) confirmed to Ms Steenkamp that the
incentive bonus as well as the
13
th
cheque were dependant
on the performance of the division.
[14]
It is trite that the plaintiff bears the onus to prove on a balance
of probabilities that the injuries he
sustained have reduced his
earning capacity, which will result in actual loss. [
See Rudman v
Road Accident Fund 2003(2) SA 234 (SCA); Road Accident Fund v
Kerridge 2019(2) SA 233 (SCA)
]. The court in Kerridge said at
para 25 “
Indeed, a physical disability
which impacts on the capacity to earn an income does not, on its own,
reduce the patrimony of an injured person.
There must be proof
that the reduction in the income earning capacity will result in
actual loss of income…” Put differently,
there must be
proof that the disability gives rise to patrimonial loss. The latter
of course is dependent on the nature of the
work that the plaintiff
had done prior to the accident or would have done had the accident,
giving rise to the disability, not
occurred.
[15]
It is not in dispute that the plaintiff sustained serious injuries in
the accident relevant to this matter
and that he still suffers from
the sequelae of those injuries. It is also common cause that he
continued to receive his full salary
for the 6-month recuperation
period after the accident, while he was away from work. On his return
to work, he resumed his duties
as Operational Director, albeit that
he was place on light duty and was mostly office-based. He continued
to earn the same salary
and enjoyed all his pre-accident remuneration
benefits. His physical ability to perform all the work-related tasks
required of
him was limited by his injuries. By February 2023, when
Ms Steenkamp interviewed him, it appears that the plaintiff’s
physical
condition improved enough for him to resume travelling and
to undertake site visits, which are requirements of his job. He is
apparently
still hampered by his injuries, but continues to perform
his duties on a daily basis.
[16]
It is accepted that the plaintiff’s life has changed both from
a physical as well as an emotional point
of view. He clearly endured
pain and suffering as well as a loss of amenities of life, which,
according to some of the experts,
has resulted in a change in his
personality and behaviour, in that he is less active socially and
personally, and is unable to
participate in many activities that he
enjoyed pre-accident. RAF has settled the claim for general damages,
which covers these
aspects of the damages suffered, agreeing to pay
an amount of R1 300 000.00. The orthopaedic doctors
anticipate that
there will be a deterioration in the plaintiff’s
physical condition requiring various medical interventions, for which
they
have recommended what type of interventions would be necessary.
The costs of these interventions have also been secured by way of
an
undertaking furnished by RAF to pay for future medical treatment,
assistive devices and the like.
[17]
The plaintiff’s earning capacity does not appear to have been
affected, as he continues to be employed
in his pre-accident position
and continues to earn his pre-accident salary and benefits. Had the
accident not occurred, he would
presumably have continued working
until age 70. Now that the accident has occurred, he is
expected to retire earlier due
to the anticipated deterioration in
his physical health. The parties have accepted that 57 years and 6
months to be that age of
early retirement. Ms Steenkamp was advised
that the plaintiff receives no additional benefits such as medical
aid contributions,
pension or travel allowance, over and above his
fixed salary, incentive bonuses and 13
th
cheque. It would
therefore, be fair to assume that his current remuneration, subject
to normal inflationary increases, would continue
until his
retirement, be it at age 70 or earlier. No evidence has been placed
before this court regarding the plaintiff’s
post-retirement
remuneration had the accident not happened, for example, whether he
would continue to receive his salary for the
remainder of his life,
whether he has invested in retirement funding, or whether his
shareholding in the company would provide
adequate funds for his
post-retirement upkeep. There is accordingly no indication that his
post-retirement financial position would
be negatively impacted by
the accident or his injuries. This court also has to take into
account that the plaintiff would benefit
financially from his
majority shareholding in the company, which would not be negatively
impacted by the accident or his resultant
injuries. The extent of
such benefit has not been placed before this court
[18]
In view of what I have said, it would appear
to me that the plaintiff’s future earning capacity
or earnings
would not be limited or impeded by his injuries. Reference to his
inability to enter the labour market on an equal
footing with others
is, in my view, not applicable to the plaintiff due to his unique
circumstances which I have outlined above.
With regard to the
contingency deduction in respect of future earnings, I accept that
there may well be unforeseen circumstances,
such as illness, error in
the estimation of life expectancy and “general hazards of life”
which will bear upon the
plaintiff’s earnings. It would be fair
therefore to allow a contingency deduction that would cover such a
situation. I am
not in agreement that the 35% proposed in the
actuarial calculation is necessary. Given the circumstances I have
mentioned, I am
more inclined to agree with the submissions made by
Ms Booysen that a 20 % contingency deduction in respect of future
earnings
would be adequate.
[19]
I base my view on the well-established position in our law that
courts need to be mindful of the current
situation of the plaintiff
and exercise a measure of common sense and judicious discretion in
avoiding an award that would amount
to a windfall to which the
plaintiff would not be entitled. The purpose of a claim such as this
is to compensate the plaintiff
for loss that he has suffered or will
suffer and not to make an award that amounts to largesse. The
plaintiff, however, must first
discharge the onus on him to prove the
loss. I am not satisfied that the plaintiff has shown that the
accident or his injuries
have caused a loss of earning capacity or
will cause a loss of earnings in the future, to the extent that he
claims.
[20]
With regard to the past loss of earnings in the amount of R84 099.00,
I am of the view that although
such amount is a discretionary
payment, dependent on the performance of the division and the
company, it appears that, had the
plaintiff been at work, he would
have earned that amount. I accordingly do not deem it necessary to
exclude that amount from the
relevant actuarial calculations.
[21]
In the circumstances, I make the following orders:
21.1
The merits having been settled, the defendant shall pay 100% of the
plaintiff’s agreed or proven damages;
21.2
The defendant shall pay to the plaintiff the sum of Two Million Six
Hundred and Eighty Eight Thousand Thirty
Seven Rands and Forty Cents
(R2 688 037.40) within one hundred and eighty (180) days
from the date of this order, in
respect of the plaintiff’s
claim against the defendant for the following heads of damages:
21.2.1 Past and future
loss of earnings/earning capacity R1 388 037.40
21.2.2 General
Damages R1 300 000.40
21.2.3 Past hospital and
medical expenses To be determined at a later stage
21.3 In
the event of the said amount not being paid timeously, the defendant
shall be liable for interest on the
said amount, at the prevailing
interest rate, calculated from the 181
st
day after the
date of this order, to date of payment;
21.4
The defendant shall furnish to the plaintiff an Undertaking in terms
of
section 17(4)(a)
of Act 56 of 1996 for payment of 100% of the
costs of accommodation of the plaintiff in a hospital or nursing home
(to be agreed
upon by the parties) or rendering of a service or
supplying of goods to the plaintiff resulting from the motor vehicle
accident
that occurred on 20 March 2019, and to compensate the
plaintiff in respect of the said costs, after the costs have been
incurred
by the plaintiff, and upon proof thereof;
21.5
The defendant shall pay the plaintiff’s taxed or agreed party
and party costs on the High Court scale
in respect of both merits and
quantum, up to and including 8 March 2023;
21.6 In
the event that the costs are not agreed:
21.6.1 the plaintiff
shall serve a Notice of Taxation on the defendant’s attorney of
record;
21.6.2 the plaintiff
shall allow the defendant one hundred and eighty (180) days from the
date of the Taxing Master’s allocatur
to make payment of the
taxed costs;
21.6.3 Should payment not
be effected timeously, the plaintiff will be entitled to recover
interest, at the prevailing rate, on
the taxed costs calculated from
the 181
st
day after the date of the allocatur;
21.7
Subject to the discretion of the Taxing Master, such costs may
include:
21.7.1 the costs incurred
in obtaining payment of the amounts mentioned in 21.2 and 21.5 above;
21.7.2 the costs
consequent upon the appointment of counsel, including counsel’s
fees for 7
th
and 8
th
March 2023 and the
reasonable fee for preparation and attendance at the case management
meeting held on 24 October 2022;
21.7.3 the reasonable and
qualifying fees of the following experts:
21.7.3.1
Dr H Hoffman – Plastic Surgeon
21.7.3.2
Drs LF Oelofse and MB Deacon (Funda Medical) – Orthopaedic
Surgeons
21.7.3.3
Drs Van Dyk and Partners – Radiologists
21.7.3.4
Ms L Grootboom - Neuropsychologist
21.7.3.5
Ms C Steenkamp – Industrial Psychologist
21.7.3.6
Ms F Steyn – Occupational Therapist
21.7.3.7
Dr P Steyn – Urologist
21.7.3.8
Mr J Terry – Orthotist and Prosthetist
21.7.3.9
Dr D Boungou- Poati – Neurosurgeon
21.7.3.10
Ms M Wasserman – Sexologist
21.7.3.11
Messrs GW Jacobson – Consulting Actuaries
21.8
The amounts referred to in 21.2.and 21.5 above are to be paid to the
Trust Account of the plaintiff’s
attorneys, A Wolmarans
Incorporated, bearing the following details:
Name of Account
Holder:
A Wolmarans Inc
Name of Bank and
Branch:
ABSA Bank, Northcliff
Account
Number:
406[…]
Branch
Code:
632 005
Type of
Account:
Cheque
(Trust)
Reference:
G
Van Rooyen/ MAT8668
21.9
The matter of the Past Medical Expenses is postponed to the pre-trial
roll of 18 September 2023 to monitor
either settlement thereof or
readiness for hearing.
_______________
S
NAIDOO, J
On
behalf of Plaintiff: Adv
H De La Rey
Instructed
by: A
Wolmarans Inc
Ground
Floor
10
Barnes Street
Arboretum
Bloemfontein
(Ref:
Mrs G Van Rooyen/BV/MAT8668)
On
behalf of Defendant: Ms
M Booysen
Instructed
by: The
Road Accident Fund
62
St Andrews Street
Bloemfontein
Claim
No. 502/1287917211/304/12.
Link 5011257
(Ms
J Gouws)