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[2023] ZAECMKHC 39
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None v Road Accident Fund (3887/2013) [2023] ZAECMKHC 39 (28 March 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, MAKHANDA)
CASE
NO. 3887/2013
In
the matter between:
MOEKETSI
RODERICK NONE
Plaintiff
and
ROAD
ACCIDENT
FUND
Defendant
JUDGMENT
LAING J
[1]
This is an action arising from a motor vehicle accident that occurred
on 6 February 2009 between the towns of Lady Grey and Barkly East.
The plaintiff had been a passenger at the time. His claim comprised
general damages, future medical expenses, and future loss of
earnings.
Background
[2]
The defendant conceded the merits and accepted liability for the
plaintiff’s
claim, as proved or agreed upon. Subsequently, the
parties achieved settlement regarding general damages in the amount
of R 400,000.
The defendant, furthermore, agreed to furnish an
undertaking to the plaintiff in terms of section 17(4)(a) of the Road
Accident
Fund Act 56 of 1996 (‘RAF Act’) for the payment
of his future medical and related expenses. The settlement was made
an order of court on 29 March 2022 and the determination of future
loss of earnings was postponed
sine die
.
[3]
The parties later prepared a written statement, setting out a special
case for adjudication under the provisions of rule 33 of the Uniform
Rules of Court (‘URC’). To that effect, the parties
agreed that:
(a)
they would not call any expert witnesses but would confine the case
to argument
in relation to the contingency deductions to be applied
to the plaintiff’s loss of earning capacity;
(b)
the contents of the report prepared by an industrial psychologist, Dr
Gideon
de Kock, dated 17 April 2019, were correct;
(c)
the calculations prepared by Munro Forensic Actuaries were correct
and
that the plaintiff’s future loss of earnings amounted to R
2,491,300 prior to the deduction of an amount for general
contingencies;
and
(d)
the only issues to be decided by the court were the general
contingency deduction
to be applied to the above sum, and costs.
[4]
When the matter came before this court, the parties confirmed that
none
of the expert reports was in dispute.
Issues
to be decided
[5]
The court is satisfied that the facts of the matter are not in
dispute
and can be recorded as set out in the expert reports. It is
apparent, furthermore, that there is no need for the hearing of
evidence.
[6]
Consequently,
the court is required to decide the issues contained in the written
statement. The special case for adjudication is
limited primarily to
the general contingency deduction to be applied to the calculation of
the plaintiff’s loss of earning
capacity.
[1]
The only remaining issue for determination is that of costs.
[7]
The relevant principles are discussed in the paragraphs below.
Legal
framework
[8]
A general
contingency deduction is made so that any possible (and relevant)
future event which might otherwise have caused or influenced
the
extent of the damages sustained by the plaintiff is considered.
[2]
Broadly speaking, contingencies have been described as ‘the
vicissitudes of life, such as illness, unemployment, life expectancy,
early retirement and other unforeseen factors’.
[3]
The courts have recognised, however, that the fortunes of life are
not always adverse; they may be favourable.
[4]
[9]
The
determination of the general contingency deduction to be made falls
squarely within the discretion of the court, which must
decide what
is fair and reasonable.
[5]
This
is far from an exact science. As Trollip JA observed in
Shield
Insurance Co Ltd v Booysen
,
[6]
the determination of contingencies involves ‘a process of
subjective impression or estimation rather than objective
calculation’.
The true nature of the task was possibly best
described by Margo J in
Goodall
v President Insurance Co Ltd
,
[7]
who remarked as follows:
‘
In the assessment
of a proper allowance for contingencies, arbitrary considerations
must inevitably play a part, for the art or
science of foretelling
the future, so confidently practised by ancient prophets and
soothsayers, and by modern authors of a certain
type of almanack, is
not numbered among the qualifications for judicial office.’
[8]
[10]
The
application of a general contingency deduction has the effect that
the damages are reduced by anything between 5% and 50%.
[9]
Precisely where the line should be drawn depends on the facts and
unique circumstances of each case.
[11]
It is necessary to consider, at this stage, the contents of the
expert reports upon which
the parties chiefly rely.
Expert
reports
Dr
Gideon de Kock
[12]
The report
of Dr de Kock indicates that the plaintiff was a 40-year-old single
male.
[10]
His minor son lived
with the mother. The plaintiff had attained an educational level of
grade 11 and resided with his brother and
sister at Khwezi Naledi
township in the district of Lady Grey. His siblings had achieved
grade 12 levels of education and one of
them was employed in a
clerical position.
[13]
Previously, the plaintiff had been employed as a storeman at a
construction site after
which he had been engaged in casual labour.
At the time of the accident, he had been employed as a road
construction worker. He
was currently unemployed.
[14]
The plaintiff sustained a fracture of the left humerus and soft
tissue injuries to the
back and left ankle. He complained of pain in
the left arm, which is weak and cannot straighten. He also complained
of pain in
the left shoulder and upper back, especially when he
bends. The plaintiff’s left ankle becomes painful when he walks
long
distances.
[15]
In the opinion of Dr de Kock, the plaintiff was likely to have
continued as a road construction
worker, but for the accident,
earning approximately R 24,000 per annum. He would probably have been
employed at the unskilled to
low semi-skilled level, eventually
attaining a career ceiling by the age of 45. At this stage, he would
have been earning approximately
R 130,000 per annum, receiving only
inflationary increases thereafter until retirement at the age of 65.
[16]
Because of the accident, stated Dr de Kock, the plaintiff has
suffered significant psychological
and physical sequelae that have
reduced his vocational prospects. He sustained a serious injury to
his dominant left hand (and
arm), thereby hampering his ability to
perform the bi-manual tasks that are most common to unskilled
employment. He was limited
to sedentary and light-duty work, not
requiring bi-manual skills or strength. Dr de Kock went on to
indicate as follows:
‘
Given the high
unemployment rate, [the plaintiff’s] advanced age, time out of
market, low level of education, low level of
intellectual
functioning, physical limitations and endurance, chronic pain, and
emotional distress, his employment prospects are
so significantly
narrowed that he is for all practical purposes regarded as
unemployable in the open market on a permanent basis.’
[17]
Dr de Kock concluded his report by saying that the plaintiff was a
candidate for a permanent
disability grant and that he should be
compensated for loss of past and future income.
Munro
Forensic Actuaries
[18]
It is not
clear who prepared the actuarial report on behalf of Munro Forensic
Actuaries (‘MFA’) but the defendant has
not placed the
contents in issue.
[11]
The
authors thereof state that they were instructed to estimate the
capital value of the potential loss of earnings suffered by
the
plaintiff because of the accident. They stipulate that their report
is based on,
inter
alia
,
the information contained in Dr de Kock’s report.
[19]
The MFA report indicates that the plaintiff was paid for one month
only after the accident,
before becoming unemployed. He later managed
to secure low-paying work, but only for a period of two months. He
has been unemployed
since mid-2010 and was not expected to secure any
further work in the future.
[20]
The capital value of the plaintiff’s past loss of earnings was
calculated as R 579,400.
His future loss of earnings was equated to
be R 1,911,900. The total capital value of the plaintiff’s loss
of earnings, excluding
contingencies, amounted to R 2,491,300.
Discussion
[21]
The plaintiff’s counsel drew attention, in argument, to the
report prepared by an
orthopaedic surgeon, Dr Piet Olivier. Dealing
with the employability of the plaintiff, the following view was
expressed:
‘
The presence of
pathology in the left shoulder girdle as well as the left upper arm
is responsible for the inability to perform
normal as well as
strenuous manual activities. The client will therefore not be able to
compete against uninjured individuals in
the future. It is not
foreseen that the current degree of disability would improve with
future medical or surgical intervention…
As the client would
be restricted to a job that entails light duties only, his future
competitiveness in the open labour market
is significantly
jeopardized.’
[22]
Similarly, plaintiff’s counsel referred to the report prepared
by an occupational
therapist, Ms Peliwe Mdlokolo. She stated that:
‘
The plaintiff
sustained orthopaedic injuries involving his left dominant upper
limb. He is currently best suited for work that would
entail
prolonged standing whilst handling objects of negligent weights
[sic]. In view of his previous academic difficulties and
cognitive
limitations noted during the assessment, he is not a candidate for
training for an alternative sedentary occupation.
He will also have
difficulties securing work in the open labour market as most jobs
that he would qualify for would require good
bilateral hand
functioning whilst handling objects of significant weights, working
at and above shoulder level, repetitive arm
movements, etc.
Therefore, it is evident that his opportunities for gainful
employment have been significantly compromised when
compared to his
premorbid state.’
[23]
With
reference to the above reports, as well as that of Dr de Kock,
plaintiff’s counsel argued for a deduction of 5% for pre-morbid
and 15% for post-morbid loss of earning capacity.
[12]
At the heart of this argument was the contention that the plaintiff
was unemployable in the open market, on a permanent basis.
This was
the conclusion reached by Dr de Kock.
[24]
In contrast, defendant’s counsel argued for deductions of 30%
and 50%, respectively.
This was because, in relation to pre-morbid
loss of earnings, the plaintiff was relatively young and there was no
proof of his
earnings at the time of the accident. It was not
possible to establish whether he was indeed earning R 2,000 per
month. Regarding
post-morbid earnings, defendant’s counsel
argued that the plaintiff was not unemployable and would have had the
capacity
to continue with employment for another 40 years. This was
supported, so it was asserted, by the findings made in the expert
reports.
It was possible that the plaintiff could obtain employment
that entailed light-duty work.
[25]
Defendant’s
counsel referred to the decision in
Lekanyane
v Road Accident Fund
,
[13]
where the court dealt with a claim brought on behalf of a minor child
who had sustained a head injury when struck by a passing
motor
vehicle. The court accepted the joint minutes of the industrial
psychologists, who concluded that the accident had compromised
the
child’s prospects of employment. However, it went on to find
that the experts did not rule out that the child might be
able to
find employment, although not necessarily be able to sustain it. The
plaintiff had also not proved that any learning disabilities
on the
part of the child would have prevented him from having completed his
schooling.
[14]
Accordingly,
the court applied deductions of 35% and 30% respectively.
[26]
Furthermore,
defendant’s counsel referred to
M
obo M v Road Accident Fund
,
[15]
involving a claim brought on behalf of an eight-year-old child who
had sustained injuries while travelling as a passenger in a
motor
vehicle. The court applied deductions of 20% and 30%, based on the
child’s age, ability to work, and prospects of employment.
[16]
[27]
The immediate problem with the authorities to which defendant’s
counsel referred
is that they pertain to a minor child. The plaintiff
in the present matter was 30 years of age at the time of the
accident. There
are considerably more uncertainties in relation to
the application of general contingencies to the loss of earning
capacity for
a minor child. His or her true abilities and relatively
unknown until later in development, whereas those of a mature adult
are
more predictable, notwithstanding the possible impact of further
work experience and training. Consequently, the authorities in
question are not helpful.
[28]
Defendant’s
counsel has also taken issue with the lack of proof in relation to
the plaintiff’s earnings at the time
of the accident,
suggesting that this would justify a higher deduction in relation to
pre-morbid earnings. To adopt such a stance,
however, contradicts the
defendant’s acceptance of the contents of both Dr de Kock’s
and the MFA reports, which relied
upon monthly earnings of R 2,000 at
the time of the accident as the premise upon which to make the
findings indicated. The defendant’s
acceptance thereof is a key
component of the special case for adjudication. It is not possible,
at this stage, for the defendant
to attempt to distance itself from
the amount in question without a suitable application having been
made.
[17]
[29]
The remainder of the defendant’s argument rests on the
assertion that the plaintiff
was not unemployable and that he still
had capacity to work. This requires closer examination.
[30]
Dr de Kock concluded that the plaintiff should, for practical
purposes, be regarded as
unemployable in the open market on a
permanent basis. He should be regarded as a candidate for a permanent
disability grant. The
findings of Dr Olivier, however, seem not to be
quite as extreme. Whereas he confirmed that the plaintiff’s
competitiveness
in the open market had been severely jeopardised, he
suggested that the plaintiff was still capable of light-duty work.
Similarly,
Ms Mdlokolo indicated that the plaintiff was best suited
for work that involved standing and the handling of light objects.
She
did concede, nevertheless, that the plaintiff’s
opportunities for finding gainful employment had been significantly
compromised.
[31]
The plaintiff’s history of learning difficulties, lack of
education, and dependence
on manual labour as a source of work, as
apparent from the reports, cannot be ignored. It would not be
unreasonable to say that
a permanent injury to his arm has all but
negated his chances of securing meaningful employment of any kind,
let alone light-duty
work. This is especially so when considering his
residence in the rural Eastern Cape, with its notoriously high levels
of unemployment.
There was no indication at all that the plaintiff
intended to or could indeed search for employment elsewhere, although
this cannot
be excluded. Ultimately, however, the outlook on his
post-morbid earning capacity is bleak.
[32]
To place absolute reliance on the views of Dr Olivier and Ms Mdlokolo
and contend that
the plaintiff was not unemployable, and still had
the capacity to work, would be misplaced. The reality is that for the
plaintiff
to earn any fixed income, he would need to find non-manual
labour. He may yet succeed, but it would be overly optimistic to
expect
this to be entirely feasible in the foreseeable future.
Relief
and order to be granted
[33]
For
purposes of the determination of general contingencies, the
Quantum
Yearbook
remains a reliable guideline.
[18]
The learned authors thereof observe that a sliding scale of 25% for a
child, 20% for a youth, and 10% in middle age, can serve
as a basis
for the deductions to be made. Moreover, the so-called ‘normal
contingencies’ of 5% for pre-morbid and 15%
for post-morbid
loss of earning capacity still apply.
[19]
[34]
As complete a picture as possible of the plaintiff’s
circumstances must influence
the assessment of the general
contingencies to be applied. To that effect, the court has considered
the contents of the expert
reports, as agreed by the parties. A
deduction of 10% for pre-morbid earnings would appear to be fair and
reasonable, mindful of
the
Quantum Yearbook
guidelines and the
impact of increasingly severe socio-economic difficulties in South
Africa. There is no merit in the defendant’s
argument for a
deduction of 50% for post-morbid earnings. The court is satisfied
that a deduction of 15%, as contended by the plaintiff,
is justified.
[35]
The plaintiff’s loss of earning capacity must be adjusted as
follows:
Loss
of earning capacity
Pre-morbid
R
579,400
Less
10% general contingencies
(R
57,940)
Sub-total
R
521,460
R
521,460
Post-morbid
R
1,911,900
Less
15% general contingencies
(R
286 785)
Sub-total
R
1,625,115
R
1,625,115
Total
R
2,146,575
[36]
In relation to costs, the plaintiff has been substantially successful
and there is no reason
why he should not be entitled thereto. The
only remaining issue is the question of liability for the
postponement on 28 November
2022. This was done to allow the
defendant to prepare and submit heads of argument. Similarly, there
is no reason why the plaintiff
should not be entitled to recover the
costs thereof.
[37]
The following order is made:
(a)
the defendant is directed to pay to the plaintiff the amount of R
2,146,575
as damages for the loss of earning capacity because of the
injuries sustained by the plaintiff;
(b)
the defendant is directed to pay the plaintiff’s costs of suit
on
a party and party scale, including:
(i)
costs of counsel; and
(ii)
the plaintiff’s reasonable qualifying and travelling expenses
to consult with;
(aa)
Dr PA Olivier;
(bb)
Ms P Mdlokolo;
(cc)
Dr G de Kock; and
(dd)
Munro Forensic Actuaries;
(c)
the defendant is directed to pay interest on the above amounts, at
the
prescribed legal rate, calculated from:
(i)
14 calendar days after the date of this order until date of
payment,
in relation to paragraph (a), above; and
(ii)
14 calendar days after the date of
allocatur
until date of
payment, in relation to paragraph (b), above.
JGA
LAING
JUDGE
OF THE HIGH COURT
APPEARANCE
For
the plaintiff:
Adv
Skoti, instructed by Yokwana Attorneys, Makhanda.
For the defendant:
Ms
Jeram, Instructed by the Office of the State Attorney, East
London.
Date
of submission of heads of argument:
07 December 2022.
Date
of delivery of judgment:
28 March 2023.
[1]
The
use of the term is preferred to ‘future loss of earnings’.
See, to that effect, see the remarks of Nicholas JA
in
Southern
Insurance Association Ltd v Bailey NO
1984 (1) SA 98
(A), at 111C-D.
[2]
Erdmann
v Santam Insurance Co Ltd
[1985]
4 All SA 120
(C);
Ncubu
v National Employers General Insurance Co Ltd
[1988] 1 All SA 415
(N); and
Burns
v National Employers General Insurance Co Ltd
[1988] 3 All SA 476 (C).
[3]
Road
Accident Fund v Guedes
2006
(5) SA 583
(SCA), at paragraph [3].
[4]
Southern
Insurance Association v Bailey NO
,
n 1,
supra
,
at 117B.
[5]
Fulton
v Road Accident Fund
2012
(3) SA 255
(GSJ), at paragraphs [95] to [96]; and
Nationwide
Airlines (Pty) Ltd (in liquidation) v SA Airways (Pty) Ltd
[2016] 4 All SA 153
(GJ), at paragraph [147].
[6]
1979
(3) SA 953
(A), at 965G.
[7]
1978
(1) SA 389 (W).
[8]
At
392H-392A.
[9]
Van
der Plaats v SA Mutual Fire & General Insurance Co Ltd
[1980]
2 All SA 129 (A).
[10]
This
was the plaintiff’s age at the date of the report, 17 April
2019.
[11]
The
report is signed by a Mr Willem Boshoff and co-signed by a Mr Eddie
Theron, both indicating that they are fellows of the Actuarial
Society of South Africa.
[12]
The
plaintiff’s counsel used the terms, ‘past loss of
earnings’ and ‘future loss of earnings’,
respectively. The terms used by the defendant’s counsel are
preferred.
[13]
(RAF209/15)
[2017] ZANWHC 124
(5 October 2017).
[14]
At
paragraph [14].
[15]
(4484/2016)
[2018] ZAGPJHC 451 (18 June 2018).
[16]
At
paragraphs [15] and [16].
[17]
As
to whether such an avenue is open to the defendant, in the
circumstances, is doubtful. The issue is not for the present court
to decide.
[18]
Koch,
The
Quantum Yearbook
(Van Zyl Rudd & Associates (Pty) Ltd, Port Elizabeth, 2021).
[19]
At
118.