Brief Summary

Damages — Road Accident Fund — Claim for general damages and loss of income — Plaintiff injured in motor vehicle accident — RAF conceded merits and agreed to future medical expenses — Court assessed general damages at R250 000 and loss of income at R1 113 035 based on expert reports and actuarial calculations — Contingency deductions applied to account for uncertainties in earnings — Total award of R1 363 035 ordered.

Comprehensive Summary

Summary of Judgment

1. Introduction

The matter concerned a delictual damages claim instituted in the High Court of South Africa, Free State Division, Bloemfontein, arising from injuries sustained by the plaintiff in a single motor vehicle accident.

The parties were Puseletso Sello as the plaintiff and the Road Accident Fund as the defendant (the RAF), sued in terms of the statutory scheme governing compensation for road accident victims.

The plaintiff issued action under case number 305/2019. The trial proceeded on 25 October 2023, and judgment was delivered on 9 November 2023. On the first day of trial, the RAF conceded the merits (liability) and agreed to furnish the plaintiff with an undertaking under section 17(4) for future medical and hospital expenses. The court was therefore required to adjudicate only the remaining quantum components.

The dispute concerned the quantification of the plaintiff’s remaining heads of damages, namely general damages, past and future loss of income (loss of earning capacity), and past hospital and medical expenses, in circumstances where the evidentiary material consisted of expert reports admitted by agreement.

2. Material Facts

The accident occurred on 16 June 2018. The plaintiff was 28 years old at the time, married with two children, and had attained Grade 7 as her highest level of education. The expert material accepted by the court indicated that she was self-employed as a vendor in the informal sector, with a work history also including domestic work and cooking, and that she primarily relied on physical labour to earn an income.

Following the accident, the plaintiff was taken to Pelenomi Hospital. The occupational therapist’s report recorded that she discharged herself because she had a six-month-old baby at home. She returned to hospital on 18 June 2018, underwent an open reduction and internal fixation of her left forearm, and was discharged on 27 June 2018.

In the clinical psychologist’s report, the plaintiff stated that she had no recollection of the accident and that she had been under the influence of alcohol at the time. The court treated this fact as explaining, in its assessment, why the plaintiff left hospital despite a serious injury.

The orthopaedic surgeon diagnosed a united radius and ulna fracture with painful instrumentation, residual wrist pain, early post-traumatic osteoarthritis of the wrist joint, and hypertrophic scarring. The orthopaedic opinion was that degeneration in the wrist would progress and that the plaintiff would likely require conservative treatment and surgery in future, with pain aggravated by physical activity and cold weather. The clinical psychologist recommended psychotherapeutic intervention to assist the plaintiff in coping with the accident’s consequences and managing her condition.

No viva voce evidence was led. By concession, the RAF accepted the plaintiff’s expert reports as factual and opinion evidence, save for a dispute about the contingency deductions to be applied to the actuarial calculation in relation to loss of income.

With regard to past hospital and medical expenses, the court recorded that the plaintiff presented no evidence in support of that component of the claim.

3. Legal Issues

The central issues for determination were the appropriate quantification of general damages and loss of income/loss of earning capacity, including the proper contingency deductions to be applied to the actuarial calculations, and whether the plaintiff had proven past medical and hospital expenses.

These issues largely concerned the application of law to fact and the exercise of a judicial discretion on quantum, particularly in relation to general damages and contingencies. The determination of past medical expenses turned on a factual question of proof, namely whether evidence had been adduced to substantiate that head of damages.

4. Court’s Reasoning

On general damages, the court approached the assessment as a discretionary evaluation of what is fair and reasonable compensation for non-pecuniary loss. The plaintiff sought R500 000, relying on several authorities cited in written submissions, while the RAF contended for R400 000 and relied on a further decision.

The court considered the plaintiff’s cited cases but concluded that they were not sufficiently comparable, because the injuries in those matters were materially more serious or involved a broader range of injuries than those suffered by the plaintiff. The court also considered the RAF’s reliance on BB v Road Accident Fund, but found that the judgment was not sufficiently clear regarding the claimant’s injuries and was therefore not useful as a comparator for quantum.

The court then had regard to earlier comparable matters involving fractures of the radius and ulna and surgical treatment, specifically Bouwer v A F Marais Construction (Pty) Ltd and Ferber v Caledonian Insurance Company Co, and it noted the updated 2023 values referenced in the judgment. In addition, the court referred to the Supreme Court of Appeal’s caution in De Jongh v Du Pisanie N.O. regarding a tendency towards higher awards for general damages, treating that tendency as only one relevant factor among others.

Applying the accepted principle that a trial court enjoys a wide discretion to determine general damages, and weighing the plaintiff’s injuries and sequelae as reflected in the expert material, the court concluded that R250 000 constituted reasonable compensation for non-pecuniary loss.

On loss of income/loss of earning capacity, the court proceeded from the industrial psychologist’s and actuary’s reports, which were accepted by the RAF save for contingencies. The industrial psychologist’s reasoning was that, given the plaintiff’s limited education, she would in any event have been restricted to practical unskilled or semi-skilled work, and that she would likely have continued as an informal vendor. However, the court noted the difficulty that the plaintiff’s vending activities were cash-based and that there was no proof of earnings, leading to reliance on estimates tied to the Quantum Yearbook reference for a spaza shop owner’s earnings range.

The dispute between the parties centred on contingencies in the uninjured and injured scenarios. The court accepted the plaintiff’s counsel’s submission that, because of the inability to verify income precisely, a 20% contingency should be applied to the past uninjured scenario and a 30% contingency to the future uninjured scenario. The court rejected the RAF’s proposal of a higher past contingency coupled with a lower future contingency, noting the RAF’s inability to substantiate why the future deduction should be lower than the past deduction in the circumstances.

For the future injured scenario, both sides proposed a 50% contingency, but the court considered that to be unduly high when read with the structure of the actuarial assumptions already adopted. The court reasoned that the actuarial model already catered for difficulties the plaintiff would face in re-entering the labour market and, significantly, that it only allowed for half-day work (four hours per day) commencing on 24 January 2025, thereby reflecting a reduced earning capacity and a delayed return to work. Against that background, and taking account of labour market conditions and the plaintiff’s injury sequelae, the court exercised its discretion to set the future injured contingency at 35%, rather than 50%.

After applying these contingency deductions to the actuarial calculation, the court determined the plaintiff’s loss of income to be R1 113 035.

On past hospital and medical expenses, the court held that the plaintiff failed to prove this head of damages because she did not present any evidence in support of it, and it therefore did not make an award under that category.

5. Outcome and Relief

The court ordered the RAF to pay the plaintiff a capital amount of R1 363 035, comprising R1 113 035 for loss of earning capacity and R250 000 for general damages. No award was made for past hospital and medical expenses due to lack of proof.

The RAF was directed to furnish the plaintiff with an undertaking under section 17(4)(a) in respect of future medical-related expenses arising from the accident, as contemplated in the order.

The court further ordered that if payment of the capital amount was not made within 180 days from the date of the order, the RAF would be liable for interest at 11.75% per annum, calculated from fourteen days from the date of the order.

The RAF was ordered to pay the plaintiff’s taxed or agreed party-and-party costs, including the reasonable qualification fees of the plaintiff’s experts whose reports were furnished, as well as the costs of counsel, with provision made for taxation procedures if costs were not agreed.

Cases Cited

Saayman v Commercial Insurance Co of SA 1972 (2) ECD.

Lombard v Road Accident Fund (47666/2017) [2020] ZAGPPHC 335.

Lee v Road Accident Fund [2010] ZAGPPHC 276.

Mohlaba v Road Accident Fund (12010/2014) [2016] ZAGPPHC 12.

BB v Road Accident Fund (39437/2011) [2021] ZAGPPHC 453 (13 July 2021).

Bouwer v A F Marais Construction (Pty) Ltd 1975 2 C&B 585 (SE).

Ferber v Caledonian Insurance Company Co (2) 1952 (1D4) QOD 347 (C).

De Jongh v Du Pisanie N.O. 2005 (5) SA 457 (SCA).

AA Mutual Insurance Association Ltd v Maqula 1978 (1) SA 805 (A).

Legislation Cited

Road Accident Fund Act 56 of 1993, section 17(4) and section 17(4)(a) (as referenced in the judgment and order).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that, after the RAF’s concession on the merits and agreement to provide a section 17(4) undertaking, the remaining disputes concerned the appropriate quantification of general damages and loss of earning capacity, and whether past medical expenses had been proven.

The court awarded R250 000 as general damages, finding that the authorities relied upon by the plaintiff were not sufficiently comparable and that the RAF’s suggested comparator was unhelpful on the facts, while comparable earlier matters supported a lower award when evaluated with the court’s discretion and the guidance in De Jongh v Du Pisanie N.O.

The court determined the plaintiff’s loss of earning capacity at R1 113 035 after selecting contingency deductions of 20% (past uninjured), 30% (future uninjured), and 35% (future injured), rejecting a 50% future injured contingency because the actuarial model already accounted for reduced capacity and delayed labour-market re-entry.

The court dismissed the claim for past hospital and medical expenses due to absence of supporting evidence, ordered payment of the capital amount, directed the furnishing of the section 17(4)(a) undertaking, and awarded party-and-party costs (including expert and counsel costs), together with interest consequences if payment was delayed.

LEGAL PRINCIPLES

The judgment applied the principle that the quantification of general damages is a matter within the trial court’s wide discretion, to be exercised in awarding an amount that is fair and reasonable in the circumstances, with previous awards serving as guidance only insofar as they are comparable on the facts.

It applied the approach articulated in De Jongh v Du Pisanie N.O. 2005 (5) SA 457 (SCA) that while there has been a tendency toward higher general damages awards in more recent times, that tendency is not determinative and is merely one consideration in the discretionary assessment of appropriate compensation.

In relation to loss of earning capacity, the court treated contingency deductions as a discretionary mechanism to account for uncertainties and imponderables, including the reliability of income information and labour-market risks, and it evaluated contingencies in light of the assumptions already built into the actuarial model, including reduced working capacity and delayed return to work.

The judgment further reflected that a claim for past medical and hospital expenses requires evidentiary proof, and where a plaintiff leads no evidence in support of that head of damages, the court is not in a position to make an award.

Finally, the judgment implemented the statutory mechanism of a section 17(4)(a) undertaking under the Road Accident Fund legislative framework, providing for the defendant’s liability for qualifying future medical-related expenses upon proof after such costs are incurred.

Sello v Road Accident Fund (305/2019) [2023] ZAFSHC 438 (9 November 2023)