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[2024] ZAECQBHC 29
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V.A.M obo T.M v Road Accident Fund (1481/2020) [2024] ZAECQBHC 29 (16 April 2024)
SAFLII
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IN THE HIGH COURT OF
SOUTH AFRICA
EASTERN CAPE DIVISION,
GQEBERHA
NOT REPORTABLE
Case No.:1481/2020
In the matter between:
V[..]
A[...] M[..] obo T[..]
M[..]
Plaintiff
And
THE
ROAD ACCIDENT
FUND
Defendant
JUDGMENT
EKSTEEN J:
[1]
The plaintiff, Mr M[..], issued summons against
the defendant (the RAF) on behalf of his minor son, T[…], who
had been seriously
injured in a motor vehicle collision which
occurred in Summerstrand, Gqeberha on 27 October 2017.
[2]
T[..]
had been a pedestrian when he was knocked down by a motor vehicle.
The RAF has acknowledged that the negligence of the
driver of the
vehicle was the sole cause of the accident and it has accepted
liability for such damages as Mr M[...] might prove
that T[..]
suffered in consequence of the collision. The parties have
subsequently settled his claim in respect of general
damages in the
amount of R1 500 000,00 and the RAF has issued an
undertaking in terms of s 17(4) of the Road Accident
Fund Act
[1]
in respect of T[..]’s future medical and hospital and related
expenses. The only issue remaining in dispute between
the
parties is T[..]’s loss of earning capacity and the RAF have
previously made an interim payment in the amount of R1 000
000 under
this head of damages. I am called upon to determine the amount that
remains due in this respect.
Evidence of the
plaintiff
[3]
Mr M[...] said that T[..] was born in December
2007 without any complications at birth. He had met his
developmental milestones
timeously, and Mr M[...] was not aware of
any health concerns prior to the accident. T[..] had not
displayed any behavioural
difficulties in as far as his
concentration, attention and speech were concerned.
[4]
Mr M[..] was previously employed by the South
African National Defence Force and he retired from this position
during 2018, when
he held the rank of a colonel. He said that
he had completed Grade 12 at school and held a National Diploma in
Security and
Defence, which he had obtained from the University of
Stellenbosch shortly before his retirement, in 2015. He had
been married
previously, but his wife passed away in 2013. She,
too, had a Grade 12 qualification and he said that she had previously
been a primary school teacher. Although Mrs M[..] had been of
Zulu extraction she grew up in the United Kingdom and returned
to
South Africa at the age of 23, as an English girl. Thus, Mr
M[..] explained that the family had spoken only English at
home.
[5]
Three children were born of their union,T[..]
being the youngest. He has two older sisters, currently aged 23
and 18, respectively.
The eldest sister has obtained a BSc
degree in Quantitative Risk Management from the Northwest University,
and is currently studying
for an Honours Degree in Quantitative Risk
Management. The other daughter has successfully completed Grade
12 and is currently
enrolled at the University of the Free State for
a Bachelor of Administration Degree.
[6]
Mr M[..] said that T[..] had initially attended a
creche in Pretoria, where he was then stationed, from 2010 to 2012.
In 2013
he was enrolled in Grade R at the Elmar College in Pretoria,
a private school. T[..] remained at Elmar College until the end
of Grade 1, in 2014. During 2015 Mr M[..] attended a United
Nations Peacekeeping Mission in Italy, and during his absence
he
placed his children with a family member in Eswatini. The
children attended Mangwayane International School where all
classes
were provided in English, and French was taught as a second
language. There was no evidence as to T[..]’s progress
at
the Mangwayane International School, save that Mr M[..] said that
T[..] is able to still understand a few French phrases.
[7]
When Mr M[..] returned to South Africa he was
deployed to Gqeberha where T[..] attended the Summerwood Primary
School. At
the end of the academic year in 2016 the school
advised that it was their view that he should repeat Grade 3 due to
his poor performance
in Afrikaans, as his first additional language.
Mr M[..] explained that T[..] had never been exposed to Afrikaans
before
being enrolled at the Summerwood Primary School, which would
account for his poor performance in that subject.
[8]
T[..] was in his second year in Grade 3 when the
accident occurred, in October 2017. After the accident he was removed
to hospital
and the treatment which he received is set out later.
Following his discharge from hospital he spent some time in the
Aurora Rehabilitation
Hospital in Gqeberha, and was finally
discharged on 23 November 2017. Mr M[..] then observed various
changes in T[..], more specifically,
that he had regular headaches,
was slower than what he had been before, was forgetful, and became
easily distracted. He also
became argumentative and displayed a
short temper.
[9]
In 2018, Mr M[..] was redeployed to Pretoria.
He said that he no longer had a permanent home in Pretoria and T[..]
was sent
back to stay with family in Elukwatini in Mpumalanga. There
he was enrolled at the Diepgezet Primary School. At Diepgezet
he was required to study Siswati, to which he had never been exposed,
as a first additional language. There is no evidence of the
extent of
the support system which he may have received in Elukwatini, but his
school reports reflect that he struggled with the
language from the
start. I revert to this issue.
[10]
In June 2022 Mr M[..] resigned from the South
African National Defence Force, because, he said, he realised then
that T[..] needed
his attention and support. He moved to
Elukwatini, where he and T[..] now reside in a four bedroomed, brick
house, close
to the border of Eswatini. Their house is well
equipped and they have access to wi-fi and cellphone reception.
[11]
In 2022, T[..] progressed to high school and moved
to the Ekulindeni Secondary School. As I have said, he had struggled
from the
outset with Siswati and never mastered the language.
At the Ekulindeni Secondary School the language of tuition was
Siswati
and T[..] was required to study Siswati, as a home language,
with English as a first additional language. His performance
in
Mathematics also showed a significant deterioration from the previous
year, and he did not achieve a pass mark in Grade 8 or
in Grade 9,
but the school progressed him to the next grade on each occasion.
T[..]’s
injuries and sequalae
[12]
T[..]’s injuries and the sequalae thereof
are not in dispute. He was 9 years and 11 months old when the
accident occurred.
He sustained skull fractures in the right
occipital and parietal regions, a small left sided subdural haematoma
and areas of haemorrhagic
contusions in the left frontal and
temporal, and right occipital lobes of his brain. He also
sustained an undisplaced supracondylar
fracture of his right elbow.
He was taken from the scene of the accident to hospital where he was
sedated and intubated in
order to protect his airways. He
received wound care, was catheterized and was thereafter sedated and
ventilated in the intensive
care unit until 21 October 2019.
His right arm was immoblised in a plaster splint and he received
neurorehabilitation. Initially,
he was unable to swallow and was fed
through a nasogastric tube. At the hospital he underwent X-rays
and a CT brain scan.
[13]
T[..] was discharged on 13 November 2017 and was
transferred to the Aurora Rehabilitation Hospital in Gqeberha where
he remained
until 23 November 2017. He was later assessed by Dr
du Plessis, a neurosurgeon, who concluded that he had sustained a
severe
concussive brain injury, which has resulted in significant
neurocognitive sequalae. He noted that while T[..] had been in
hospital he had convulsed and was placed on anticonvulsant
medication. Dr du Plessis opined that T[..]’s risk of
epilepsy
was approximately 5% for at least 20 years after the
accident due to the focal component of the brain injury.
However, he
did not indicate what the risk to the normal, healthy
population, was and it is accordingly difficult to assess the
significance,
if any, of the risk of epilepsy.
[14]
T[..] was also assessed by Ms Rita du Plessis, a
counselling phycologist, in August 2019, who concluded that his brain
injury has
resulted in significant and persisting changes in his
neuropsychological functioning. His clinical presentation was
considered
to reflect the outcome associated with a severe head
injury. Ms du Plessis concluded that his cognitive difficulties, as
well as
difficulty with self-regulation that he exhibited, were
considered to represent the sequalae associated with significant
cerebral
damage. In her opinion T[..] had been rendered an
emotionally vulnerable individual who remained at risk of developing
physiological
systems of an organic nature related to the head injury
he sustained. She opined that the impact of the cerebral damage
could
be expected to become more evident as he grows older and
progresses into more challenging environments, socially and
intellectually.
Accordingly, she predicted that the cumulative
effect of the inconsistency in his ability to apply his cognitive
capacity, deficiencies
in several domains of cognitive functioning,
in combination with changes in his mood and behaviour, would impact
on his school
progress, his personal life and eventually on his
career.
[15]
Ms Friedrichs, and Ms Magakwe, occupational
therapists on behalf of the respective parties, assessed T[..] on 25
August 2020, and
24 May 2022, respectively. They prepared a joint
minute, on 2 October 2023, which has been admitted into evidence by
agreement.
At the time that Ms Friedrichs saw T[..] he was in
Grade 6 and Ms Magakwe assessed his condition two years later.
[16]
The occupational therapists were in agreement that
T[..] would perform best in a special school, but they opined that it
was unlikely
that he would be successfully placed in such a school
due to his age and academic record. Thus, they concluded that
it was
likely that T[..] would repeat grades in high school and would
ultimately leave school with a Grade 11 qualification. However, they
agreed to defer to the view of the educational psychologists in
respect of T[..]’s post-accident academic potential and they
considered that his future employment opportunities were dependent
upon his level of education.
Issues in dispute
[17]
As adumbrated earlier, the only matter for
determination relates to T[..]’s loss of earning capacity.
In this regard
each party tendered the evidence of an educational
psychologist and an industrial psychologist. I shall revert to
their evidence
to the extent necessary.
[18]
It was
common ground between the parties that T[..] would have completed
Grade 12 (NQF 4) in mainstream education with a diploma
endorsement,
and a three-year diploma qualification (NQF 6), had the accident not
occurred. However, they differed on his
probable career
progressions and earnings thereafter. It was contended, on
behalf of Mr M[..], that T[..] would have progressed
to a Paterson
C4/C5 complexity level at the age of 45 years with earnings
calculated in accordance with the corporate survey earnings.
[2]
By contrast, the RAF contended that T[..]’s earnings and career
progression would have occurred in line with the ‘STATSSA
Earnings by Level of Education’
[3]
on the level of a Grade 12 qualification with a diploma, plateauing
on the late upper quartile at the age of 46. The parties
were
in agreement that, but for the accident, T[..] would probably have
retired at the age of 65.
[19]
In
respect of the post-morbid earning capacity, it was contended on
behalf of Mr M[..] that T[..] would now probably achieve a Grade
11
(NQF 3), but would not be in a position to function at the same level
as his uninjured counterparts who have completed Grade
11.They
postulated that T[..] would experience a period of unemployment
before obtaining temporary work, and thereafter in a permanent
capacity, plateauing on a Paterson A3 level,
[4]
retiring at the age of 65.
[20]
The RAF contended that he would still achieve a
Grade 12 with a certificate and that he would thereafter earn and
progress in accordance
with the STATSSA earnings, for Grade 12 with
certificate, and retire at the age of 65. Again, the industrial
psychologists differed
on his probable career path and earnings.
The legal approach
to loss of earning capacity
[21]
In
Dippenaar
[5]
the Supreme Court of Appeal described the principle as follows:
‘
I
n
our law, under the
lex
Aquilia
,
the defendant must make good the difference between the value of the
plaintiff's estate after the commission of the delict
and the
value it would have had if the delict had not been committed. The
capacity to earn money is considered to be part of a
person's estate
and the loss or impairment of that capacity constitutes a loss, if
such loss diminishes the estate.’
[6]
[22]
In
Bailey,
[7]
Nicholas JA discussed the approach to the problem of quantifying a
claim of this type. He explained that ‘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 a court can do is to make an estimate, which is often
a very
rough estimate, of the present value of the loss.’
[8]
He said that the court has two possible approaches open to it.
One is for the judge to make a round estimate of the amount,
which
seems to him to be fair and reasonable. That, he described as
‘entirely a matter of guess work, a blind plunge
into the
unknown’.
[9]
The
other way is to try to make an assessment, by way of mathematical
calculations, on the basis of assumptions resting on
evidence.He
emphasised that the validity of this approach depends on the
soundness of the assumptions, and these may vary from
strongly
probable to speculative.Either approach involves guesswork to a
greater or a lesser extent.
[10]
[23]
Nicholas
JA said that the second method 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.’
[11]
[24]
However, Nicholas JA
proceeded to explain:
‘
Where
the method of actuarial computation is adopted, it does not mean that
the trial Judge is "tied down by inexorable actuarial
calculations". He has "a large discretion to award what he
considers right" (
per
HOLMES
JA in
Legal
Assurance Co Ltd v Botes
1963
(1) SA 608 (A)
at
614F). One of the elements in exercising that discretion is the
making of a discount for "contingencies" or the
"vicissitudes of life".’
[12]
[25]
Thus,
in
D’Hooghe,
[13]
Chetty J summarised the approach as follows:
‘
It
follows from the aforegoing authorities that where, as
in
casu
,
a plaintiff suffers a permanent impairment of earning capacity the
proper method of determining such loss is – (i)
to
calculate the present value of income which the plaintiff would have
earned but for the injuries and the consequent disability;
(ii)
adjust that figure having regard to all relevant factors and
contingencies; (iii) calculate the present value of the plaintiff’s
estimated future income having regard to the injuries sustained and
the consequent disability; (iv) adjust the latter figure
with
due regard to all relevant factors and contingencies; and (v)
subtract the latter from the former.’
[26]
The parties were agreed that the second method
described by Holmes JA in
Bailey
should
be applied, and they submitted an actuarial calculation reflecting
the outcome of their divergent contentions. The
calculation
reflects an adjustment of 20% in respect of the pre-morbid
calculation, and 35% in respect of the post-morbid calculation,
for
illustrative purposes, in respect of ‘contingencies’.I
shall revert to the appropriate adjustment to the figures
later.Suffice it to record at this stage that the actuarial
calculation, based on the plaintiff’s contentions, reflects the
present value of the income which T[..] would have earned, but for
his injuries, in the amount of R9 033 496,00, before any adjustment
The current value of his estimated future income, having regard to
his injuries, was calculated in the amount of R2 341 020,00.
[27]
On an acceptance of the predictions of the
defendant’s educational and industrial psychologists, the
present value of the
income which T[..] would have earned, but for
his injuries and consequent disability, amounts to R7 623 206,00.
His estimated
future income, having regard to his injuries, was
calculated at R4 666 430,00. I revert to these.
T[..]’s
pre-morbid earning capacity
[28]
As I have said, the
parties were agreed on his probable academic qualification in his
pre-morbid condition. Mr Prinsloo, an industrial
psychologist, who
testified on behalf of T[..], postulated that he would thereafter
have followed an academic career, progressing
as I have set out
earlier. Mr Toma, the industrial psychologist on behalf of the RAF,
postulated that he would have rather enrolled
for a diploma at a TVET
College. He provided no particular reason for preferring this career
path to that postulated by Mr Prinsloo.
By contrast Mr Prinsloo
referred to T[..]’s family history, and the preferences chosen
by them. His mother, as I have
said, was a teacher, and both of
his sisters are enrolled at university, one for a post graduate
qualification. Mr M[..] followed
a military career, but nevertheless
pursued an academic qualification late in his career. I think
that there is considerable
merit in Mr Prinsloo’s reasoning
that all T[..]’s role models have chosen to pursue academic
careers. Logic dictates
that, as a probability, T[..] would
have done likewise. Accordingly, I intend to adopt the career
path predicted by Mr Prinsloo
in the pre-morbid scenario.
[29]
That brings me to the
predicted career path progressions postulated by the two industrial
psychologists to which I have referred
earlier. Mr Toma, in his
report, postulated that there would have been no career progression
between the ages of 27 and 45, at
which point an enormous increase in
remuneration would occur. Predictably, this startling proposition was
the subject of considerable
cross-examination, and Mr Toma initially
sought to defend the position. Realizing the extent of the fallacy in
the argument, he
was constrained to acknowledge the error and
spontaneously sought to adjust his opinion. I formed the firm
impression that
the adjustment was not a considered opinion but,
rather, an escape mechanism under cross-examination.
[30]
Similarly, Mr Toma
postulated that T[..] would have had no progression in earnings from
the age 46 until his retirement age of 65.This,
Mr Gajjar, on behalf
of the RAF, acknowledged was open to question, however, he submitted
that it was not beyond the realm of possibility.
I have outlined the
approach to actuarial calculations in respect of earning capacity
earlier. As the Supreme Court of Appeal emphasised
in
Bailey,
the validity of the
approach depends upon the soundness of assumptions made in the course
of calculation, which may vary from strongly
probable to speculative.
It is a salutary approach to base the calculation upon the most
probable assumption and to recognise the
other, more remote,
possibilities in the adjustment of the ultimate figure. Thus, Mr
Gajjar may be correct that it is not beyond
the realms of
possibility, but, absent some evidential basis for the prediction, it
must be considered to be improbable. For this
reason, too, the career
path progression predicted by Mr Prinsloo is to be preferred for
purposes of the calculation.
[31]
This brings me to the
final subject of debate in respect of the pre-morbid calculation. I
have explained earlier the different salary
surveys relied upon by
the respective industrial psychologists. Mr Prinsloo defended the
Deloitte Consulting Surveys, as he said
that they were compiled from
actual information provided by approximately 200 participating
companies in South Africa and accurately
provide gross and net
earnings together with the qualifications and job titles in respect
of the various employees. He contended
that the surveys were
transparent and subject to peer review. He was critical of the
STATSSA survey, and he argued that this survey
utilised, at least in
part, information obtained in the Census 2022 document. He said that
participants in the STATSSA survey are
not required to provide proof
of the level of education and earnings of employees, and he suggested
that the information was purely
hearsay and should be ignored. He
further contemplated that the information was derived from responses
by individual respondents,
and that they often do not understand the
difference between gross and net income. In the result, in his
experience, the
earnings reflected in the STATSSA survey is
approximately 40% less than that reflected in the Deloitte survey.
[32]
Mr Toma, on the other
hand, criticised the Deloitte survey as he contended that the 200
companies that participate in the survey
are primarily large
corporate entities, in the metropolitan centres, who tend to pay
greater salaries than those received by the
majority of employees,
particularly in rural areas. He said that he preferred the
STATSSA survey which was compiled from
quarterly labour surveys and
quarterly employment statistics received from approximately 20 000
companies who participate in the
surveys, as the results are
necessarily more representative of the majority of employees in South
Africa. Mr Toma did, however,
acknowledge that he had relied
only on basic earnings and not on the ‘package earnings’
referred to by Mr Prinsloo.
[33]
Thus, Mr Williams, on
behalf of Mr M[..], submitted that the STATSSA surveys should be
ignored as they are unreliable. The
industrial psychologists
were agreed that the Deloitte survey is based on 200 employers who
participate in the survey. There
was no evidence as to the
identity of these companies, but Mr Prinsloo did not contest the
proposition that they generally are
large corporate entities
operating in the metropolitan areas. I consider that they
probably do pay larger salaries than the
majority of employers in
South Africa, but that does not detract from the value or the
reliability of the survey. I accept
that the Deloitte survey is
a useful guide to determine what an employee could potentially earn
if he were to be employed in a
large corporate entity.
[34]
I accept for purposes
of this judgment that the information provided by participants in the
census has not been verified. However,
I do not think that it follows
that it should therefore be ignored. No motivation has been suggested
for the proposition that participants
would provide false information
in respect of their earnings, nor is there any evidential foundation
for the argument that they
often misunderstand the difference between
gross and net income. It is pure speculation. The
usefulness of the STATSSA
survey is that it demonstrates that a
significant number of South African employees do not earn at the
rates reflected in the Deloitte
survey.
[35]
For these reasons, I
consider that it is appropriate to utilise the Deloitte survey, and
the Paterson scales, relied upon by Mr
Prinsloo, for purposes of the
actuarial calculation and to take cognisance of the substantially
lower earning rates reflected,
on a wide scale, in the STATSSA survey
when seeking to make an appropriate adjustment to the calculation.
Post-morbid
earning capacity
[36]
The educational
psychologists held different opinions relating to T[..]’s
academic potential, in his injured state.
On behalf of T[..],
Ms Prinsloo expressed the view that he would probably not achieve
more than a Grade 11 qualification. Ms Mantsena,
on behalf of the
RAF, acknowledged his significant compromise, but was of the opinion
that, with the necessary interventions, it
was possible for T[..] to
pass Grade 12. Much of the trial was devoted to an analysis of
T[..]’s school reports. I
recorded earlier that he
attended Diepgezet, in Mpumalanga, after the accident, where he was
required to study Siswati, as a first
additional language. It
was entirely new to him and it is common ground between the parties
that he has never mastered the
language. Notwithstanding his
poor performance in Siswati he nevertheless made steady progress in
all his other subjects,
and remained comparable to his peers.
[37]
As adumbrated earlier, in
2022, when he progressed to Grade 8, T[..] was moved to the
Ekulindeni Secondary School, where
the language of tuition was Siswati and he was required to study
Siswati, as his home language,
with English relegated to the first
additional language. His marks showed an immediate deterioration and
his average dropped by
approximately 10%. In particular, his
performance in Mathematics deteriorated significantly. When he
progressed to Grade
9 he was afforded the opportunity to make subject
choices. It was decided that he study Mathematics, rather than Maths
Literacy,
which is less challenging. Self-evidently, the management
of his education has contributed to his poor performance in the
classroom.
[38]
Hence, Ms Mantsena suggested three possible
interventions. Firstly, she proposed that he would perform better in
a special school.
If this could not be achieved, she proposed an
intervention and support system from the educational authorities,
including possible
additional and remedial tuition, and that his
curriculum should be changed so as to follow Maths Literacy, and
Siswati as an additional
language, thus reverting to English home
language. The first proposal may be easily dealt with. I
have referred earlier
to the skepticism of the occupational
therapists in this regard, a view shared by Ms Prinsloo. Ms
Mantsena acknowledged that
there was no special school near to
T[..]’s home. On the conspectus of the evidence it is not an
option open to him.
[39]
Ms Mantsena acknowledged that, without the
necessary interventions, in particular the change in subject choices,
it is unlikely
that T[..] would progress beyond Grade 11. She
also acknowledged that, to the best of her knowledge, Ekulindeni
Secondary
School does not offer English as a home language, and that
a special teacher would have to be obtained for that purpose.
Hence, Mr Williams argued that this possibility should fall away.
[40]
I do not think so. T[..]’s claim is for a
loss of earning capacity. A plaintiff cannot boost his damages
claim by intentional,
poor educational choices. It was not
suggested that there was no school available in the vicinity that
offers tuition in
English and Siswati as an additional language.
The fact that Ekulindeni Secondary School does not offer English as a
home
language, is in my view, no answer to the proposition. If
his educational prospects may be enhanced by a change of schools,
even if he needs to repeat a year, he should do so.
[41]
Nevertheless, the educational psychologists were
not agreed on the probable success of the interventions suggested.
For the
reasons set out earlier the analysis of the school reports,
on their own, is of limited assistance. What cannot be ignored,
is the extent of the brain injury that T[..] sustained. The
conclusions of Dr du Plessis and Ms Rita du Plessis are set out
earlier. Irrespective of the management of T[..]’s
education, the outcome that is presently observed was predicted
in
2019 on the strength of the psychometric tests carried out by Ms du
Plessis at the time. Her findings find support in
the
psychometric tests carried out by Ms Prinsloo, and the occupational
therapists were agreed, in their view, that the most likely
outcome
was that T[..] would pass Grade 11. The general body of
evidence leads, ineluctably, to the conclusion that the brain
injury
is the predominant cause of T[..]’s present difficulties, and
it supports the prediction that he will probably not
progress beyond
Grade 11.
[42]
A finding that T[..] would probably not
have progressed beyond Grade 11 serves to undermine the entire
post-morbid prediction of
Mr Toma. As outlined earlier, he
relied on the STATSSA ‘earnings by level of education’
survey. His entire
postulation is based upon a Grade 12
qualification. Moreover, under cross-examination, he
acknowledged further weaknesses
in his postulation and sought to
adjust the scales of earnings. In respect of his career path
progression, Mr Toma’s postulation
ignores the reality of his
injury, which prevents T[..], notwithstanding his level of education,
to perform in the workplace at
a level commensurate with his
qualification. I prefer to adopt the predicted career path and
earnings advanced by Mr Prinsloo,
which gives logical recognition to
the nature of his injury.
Adjustment
to the calculated loss
[43]
I have recorded
earlier that the parties have prepared an actuarial calculation of
T[..]’s loss on the acceptance of their
divergent views.
I have adopted the career path and earnings predicted by Mr Prinsloo
in respect of T[..]’s pre-morbid
earning capacity. The
actuarial soundness of the calculation is admitted and the only issue
that I am required to determine
is the extent of the adjustment to be
made to the figure.
[44]
Mr Williams submitted
that I should use the ‘usual’ pre-morbid contingency
deduction of 25% in respect of a child, as
a point of departure.
He argued that the actuarial calculation is based on conservative
pre-morbid academic and career postulations
and that a 20%
reduction in the pre-morbid calculation was more appropriate.
Reliance was placed on the
Quantum
Yearbook
by
Robert Kock, 2024, and
Bailey,
for the argument that
the ‘usual’ contingency reduction for a child was 25%.
Neither of these authorities offer
any support for the existence of
‘usual’ contingencies. Koch emphasised that there
are no fixed rules as regards
general contingencies, and the
determination thereof is the prerogative of the court. In
Bailey
the Supreme Court of
Appeal said:
‘
The
amount of any discount may vary, depending upon the circumstances of
the case. … The rate of the discount cannot
of course be
assessed on any logical basis: the assessment must be largely
arbitrary and must depend upon the trial judge’s
impression of
the case.’
[45]
The discount must be
determined according to the facts of the particular case and the
trial judge’s impression of the circumstances
of the case.
It would be wrong for a trial judge simply to adopt a ‘usual’
adjustment figure, whether as a starting
point, or an end result.
[46]
In
Bailey
counsel for the
appellant had argued for a 50% deduction from the calculated figure,
that he submitted would be appropriate in the
circumstances,
especially because the victim was a young child with virtually her
whole life before her, so that she would have
been exposed to a very
long time of the vicissitudes of life.
[47]
The Supreme Court of
Appeal explained:
‘
It
is, however, erroneous to regard the fortunes of life as being always
adverse: they may be favourable. In dealing with
the question
of contingencies, WINDEYER J said in the Australian case of
Bresatz
v Przibilla
[1962] HCA 54
;
(1962)
36 ALJR 212
(HCA) at 213:
"It
is a mistake to suppose that it necessarily involves a 'scaling
down'. What it involves depends, not on arithmetic, but
on
considering what the future may have held for the particular
individual concerned... (The) generalisation that there must be
a
'scaling down' for contingencies seems mistaken. All
'contingencies' are not adverse: All 'vicissitudes' are not harmful.
A particular plaintiff might have had prospects or chances of
advancement and increasingly remunerative employment. Why count the
possible buffets and ignore the rewards of fortune? Each case depends
upon its own facts. In some it may seem that the chance of
good
fortune might have balanced or even outweighed the risk of
bad."’
[48]
The general
contingencies cover a wide range of considerations which vary from
case to case and may include: taxation, early
death, saved
travel costs, loss of employment, promotion prospects, divorce, etc.
But, it must follow from the reasoning
in
Bailey
that the probability
of the assumptions used in the calculation of the loss have a
material impact on the adjustment of the calculated
figure.
[49]
Thus, in
Bailey
,
it had been assumed that the minor child would have pursued a similar
career to her mother, who was an apple grader. At
the time
apple graders were paid at a rate of R36 per week, whilst the wage of
an ordinary female farm labourer was R22 per week.
[50]
The Supreme Court of
Appeal reasoned:
‘
In
the present case it may be that (the minor) would have earned less
than the R36 per week which was taken as the basis of the
calculation, although that seems unlikely having regard to the low
level of that remuneration. It is in my view more likely
that
she would have earned more than that figure, and even a small
increase in terms of money would have had a major effect on
the final
result.’
[51]
I return to the
argument that conservative assumptions have been made in the
calculations. As I have said, his pre-morbid projection
was common
cause. During the evidence Ms Prinsloo said that, in hindsight,
her pre-morbid postulations were conservative.
She said that
she now notes that T[..]’s eldest sibling has obtained a degree
and is in the process of studying towards Honours
therein, and that
his younger sister has completed her matric with a degree
endorsement, and is also now studying for a degree.
It seems to
me that the essence of the family history and the potential and
inclination of T[..]’s siblings were already
considered in the
original report. Ms Prinsloo had set out at length the ability
of T[..]’s elder sister, and the marks
that she had achieved in
her first and second year at university. These marks ranged,
primarily, between 65 and 90% so that her
academic ability had
already played a significant role in Ms Prinsloo’s original
opinion. I do not consider that her
success in her first
degree, or her pursuit of a further one, could have a material impact
on the assessment originally made in
respect of T[..]’s
probable potential, but for the accident. For the reasons set
out earlier I have accepted the career
path and the earning
progressions predicted by Mr Prinsloo, based on Ms Prinsloo’s
original assessment. The justification
advanced in evidence for
this change of heart was not convincing, nor was notice given in
terms of rule 36(9) of the rules of court
that she would express this
opinion.
[52]
The possibility of an
over-optimistic assessment of his future earnings seems to me to
weigh more heavily in this instance.
I have discussed earlier
the criticisms of the respective surveys relied upon by Mr Prinsloo,
on the one hand, and Mr Toma, on
the other. The reliability of
the Deloitte survey to the extent that it reflects information
obtained from the participating
companies is not disputed, and our
courts frequently rely on these surveys. It is, however,
significant that the survey is
limited to 200 participating
companies, generally large cooperations. The vast majority of
South African employees are not
employed by these companies, and
irrespective of the criticism of the figures reflected in the STATSSA
survey, it does illustrate
that a large discrepancy exists between
salaries paid by the large cooperations participating in the Deloitte
survey and thousands
of small companies, who do not. I have set
out earlier the reasoning of the Supreme Court of Appeal in
Bailey
in arriving at a
contingency figure of 25%. The court had reasoned that there
was a strong likelihood that the minor child
could have earned more
than the salary utilised in the calculation. On the evidence
before me I consider, in this case, that
it is more likely that T[..]
would not have been employed in one of the major corporations in
South Africa. On a consideration
of all the evidence it must be
accepted that T[..] might have pursued a degree qualification after
leaving school. It is
a positive contingency which has to be
considered, but it is outweighed, in my view, by the possibility of
an error in the calculation
of his likely earnings. On a
consideration of all the evidence I consider that a reduction of 25%
on the calculation in respect
of the pre-morbid earning capacity is
appropriate in the present case.
[53]
In respect of the
post-morbid calculation, counsel were agreed that a reduction of 35%
would be appropriate. The submission
accords with my view of
the case. Accordingly, in the assessment of the value of
T[..]’s loss of earning capacity I
adopt the following
approach:
Value
of income uninjured:
R9 033 496,00
Less
contingency deduction (25%):
R2 258 374,00
Total
R6 775 122,00
Value
of income injured:
R2 341 020,00
Less
contingency deduction (35%):
R 819
357,00
Total
R1 521 663,00
Accordingly,
an award of R5 253 459,00, being the difference between the adjusted
figure for the value of T[..]’s projected
earnings in the
uninjured condition, on the one hand, and the injured condition, on
the other, represents a fair award. As
I have recorded at the
outset, an interim payment of R1 000 000,00 has previously been made,
which must be deducted from this figure.
[54]
In the result, the
following order is made:
1.
The defendant is to
pay to the plaintiff the amount of R4 253 459,00 (being the capital
sum of R5 253 459, less the interim payment
of R1 000 000,00) in full
and final settlement of the plaintiff’s claim for loss of
earning capacity.
2.
Payment of the
aforesaid amount in paragraph 1 above shall be made directly to the
plaintiff’s attorney of record, PBK Attorneys’
Trust
Account, details of which are as follows:
Name:
Pierre Kitching
Incorporated
Bank:
Nedbank
Branch
code: 1[...]
Account
Number: 1[...]
Reference:
MAT5880
3.
The defendant shall
pay interest on the aforesaid amount in paragraph 1 above at the
prevailing prescribed interest rate, calculated
from a date 14 days
after the granting of this order, in accordance with
section 17(3)(a)
of the
Road Accident Fund Act, 56 of 1996
, as amended.
4.
The defendant
shall pay the plaintiff’s costs of suit, as taxed in accordance
with scale B recorded in
rule 69
(7), such costs to include the
qualifying fees, if any, of the experts in respect of whom plaintiff
had given notice in terms of
rule 36(9)(a)
and (b), as well as the
costs of the reasonable and necessary disbursements incurred in
securing the attendance of those witnesses
who were called to testify
at the trial, together with the reasonable and necessary
disbursements in securing the attendance of
the plaintiff to testify
at the trial.
5.
The defendant is to
pay interest on the plaintiff’s taxed costs at the prevailing
legal rate from a date 14 days after the
date of taxation.
J W EKSTEEN
JUDGE OF THE HIGH
COURT
Appearances:
For Plaintiff:
Adv K Williams
Instructed by:
PBK Attorneys
Gqeberha
For Defendant:
Adv G Gajjar
State
Attorney
Gqeberha
Date Heard:
7 March 2024
Date Delivered:
16 April 2024
[1]
Act
56 of 1996.
[2]
The
National
All-Incumbent Remuneration Survey of Deloitte Consulting
dated
1 April 2020; the
Corporate
Survey Earnings
as
published by Deloitte Consulting (Pty) Ltd; and the
Annual
Earnings for Non-Corporate Sector the Unskilled Categories
,
as compiled by Deloitte Consulting.
[3]
Compiled
by Jaen Beelders and published by Robert Koch ‘
The
Quantum Yearbook 2023
’
at
p. 125.
[4]
On
the
Deloitte
Remuneration Survey
.
[5]
Dippenaar
v Shield Insurance Company Limited
1979
(2) SA 904
(A) at 917B-C.
[6]
See
also
Santam
Versekeringsmaatskappy Bpk v Bylevelt
1973
(2) SA 146
(A) at 150B-D.
[7]
Southern
Insurance Association Limited v Bailey NO
1984
(1) SA 98 (A).
[8]
At
113G.
[9]
At
113H.
[10]
See
Bailey
at
113H-114A.
[11]
At
114D.
[12]
At
116G-H.
[13]
D’Hooghe
v Road Accident Fund
2010
(6J2) QOD 1 (ECP).